Thursday, January 10, 2008

Equity Market Comment - 1/10/2008

Barring a complete meltdown in the equity markets on Friday Jan 11th, the weekly chart is on the verge of a major price reversal which would confirm the daily work as well.

The S&P 500 Bullish Index now sits at only 30% bullish, a 5 year low.

We are also awaiting a turn up in the Three Line Break Sentiment chart. Once this chart turns

up and especially from such deep bearish levels, it will confirm the intermediate term bottom and give the green light to really jump in with both feet.
The chart below shows the Fear Index moving up enough from its very fearful readings to generate an intermediate term buy signal. More evidence on the table.
Although there are some indications that a short term pullback is nearing, the majority of the technical work is confirming a buy the weakness strategy.
The 15 minute chart is calling for either some type of short term pullback from here or a narrow consolidation. Either way, it has confirmed what it deems as an intermediate term low point.
A move above the 200 period moving average on the 15 minute chart will almost confirm 100% that a major intermediate term low has been put into place.
The daily chart has two back to back higher days with strong volume, which is bullish.
The volatility of prices we have seen is telling us that we may get a pullback in here before
the resumption of the rally.
Any weakness we may get here should be used to ramp up your equity exposure.
Markets very rarely go straight up and given the price structure damage we have seen, a back and fill scenario would seem most logical.
I will be updating both the Short Term Aggressive Trading Account and the 20% in 7 Days Account tonight if I have the chance. I still do not have the PPDI position posted and the call options as well.
We also purchased AMD at the open today, but I am waiting to purchase call options on the first pull-back.

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