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Different day, same view


When I went away last Thursday, my view was that the market had been moving toward oversold and was poised to retest the post October highs over coming weeks. Now that I am back and the markets are just about exactly where they were when I left, and have actually become more oversold - I see no reason to change the retest view.

The market continues to track so closely to last year that it is almost scary. Charles Norton of GNI Capital pointed out to me this morning that the S&P 500 (SPX) bounced off its 50-day moving average last December 13th after a brief pullback that began in early December, and then rallied 5% into the end of the year. Hmmmmm, doesn't that sound familiar. The market (as measured by the SPX) has pulled back since early December after a stunning rally, has not only worked off the daily overbought condition, but is actually oversold.

I know - I know...too many people are saying this rally is just like last year and it can't be that simple. Sounds to me like the consensus view must be negative then, because it has been just like last year for a while now. If it isn't broken then there is no reason to fix it. So far the view has worked (since before it became fashionable to talk about it) so I chose not to tinker with it - that would be just plain goofy (don't worry, as my vacation buzz wears off, I will stop the lingo).
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I can't wait to see my picture with Goofy
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