The Brave New Bull Market?

Jeffrey Cooper  Mar 27, 2009 10:05 am

The Brave New Bull Market?
 
Waiting for the bear to return - with a vengeance.
 

Conclusion: As you know, 540 degrees is an important market movement. 830 is 540 degrees up from low. Yesterday, the S&P carved out a large range up day with a close just above 830. Many times I have witnessed these square outs occur right on the close with a stock or an index ‘buffed out’ right on the close with all the horses locked in the barn and a match thrown with a gap down the next morning. And, vice versa.

Compression high closes and compression low closes after persistent runs. The bulls would love to see a strong weekly close on the high of the week but someone big may pull a chair away before the quarter end music stops: there may be some players looking for a head start out the door in front of G-20 and earnings next week. Yesterday’s close at the extreme of the session and our 830 level may have been climatic for the short term.

Strategy: I would only be short under 827 looking for a move to 805 which should be supportive. Many stocks have reached resistance and are up 14 days or so in a straight line and a small round of profit taking could turn into something more in front of the weekend. I would turn defensive if unusual weakness develops and persists after the first half hour or so.

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Comments (3) See All Comments »
03-27-2009, 1:39 pm
I find this analysis very useful. Thanks for putting things in perspective.
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03-28-2009, 8:47 pm
Because that is the ONLY thing that stopped the Depression.
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03-29-2009, 4:12 pm
Good one, thanks.

Considering the number of jobs lost, the trillions + in derivatives hiding in the shadows, commercial real estate, and increased taxes; this seems to me to be a recipe for April 1930.
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