Tuesday, October 9, 2007

Equity Market Comment 10/9/07

RISING WEDGE PATTERNS SUCH AS WE ARE SEEING ON THE CHART OF THE S&P 500 (BLUE LINES) ARE A VERY BEARISH PATTERN AND ALSO VERY RELIABLE. THESE PATTERNS ARE TYPICALLY RECTIFIED WITH A SHARP FAST DECLINE.

If you had asked me 2 weeks ago if the equity markets would go to new all time highs before a correction came in I would have thought the odds pretty slim.


Well, sometimes slim odds come to fruition and currently we have a case in point.

The market put together quite a late rally in price today after the notes from the last FOMC meeting were released.


I continue to stress however that this is not a time for celebration, but rather a cautious stance is needed at times like this. I realize that it is easy to get sucked into rallies like this one and it is difficult to sit on the sidelines as stocks continue to appreciate, but I firmly believe your patience will be rewarded.


I remain hedged.


No comments:

Trend Analysis LLC Headline Animator