Sunday, March 21, 2010
S&P Bigger Picture Still Unclear, but Short Term Picture Suggests Further Weakness
Sorry for the late and brief post; it's been a very busy weekend and I'm barely able to squeeze this in but I think we're at an important juncture and I'd like to chime in with my core thoughts.
The S&P is not unfolding very impulsive-looking since the top. But I can label it as such with a little "maneuvering" without breaking an EWP rules. Because of its imperfect structure, I can't say with any certianty that a major top is in. But the fact that the Dow and Nasdaq 100 made new highs on the year while the S&P and Nasdaq Composite did not, make me thing the overall market is very exhausted and that a larger decline is warranted before we even think about getting bullish. Not to mention all the momentum extremes reached, and the divergences lasting several days that also lend themselves to the short term bearish case.
So I see the stock market in a near term decline phase that MAY develop into a long term decline phase. But we'll have to wait and let this market unfold further to get a better opinion of the longer term view. One "X factor" is the Health Care vote here in the US. I'm not a fundamental or news guy, but I can't help but think that with the passage of socialized medicine in the US, the global capital of capitalism will not be so capitalist anymore. And that may somehow have a negative effect on our stock market. So perhaps that will add a little fuel to the bears' fire. This isn't my specialized area so this is merely an educated guess.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.