Friday, October 23, 2009

Steep Market Declines Are Coming

Highlighted by Jesse.





Posted by Moolah at 8:16 AM

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2 comments:

Moolah said...

from FinancialSense market wrap, Martin Goldberg

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.... Finally, the price/volume relationships in the US market seem to be pointing to distribution. Over the last couple of weeks, the “up” days have occurred on low and the “down” days on high volume.

The foregoing data shows that the market appears to be under some important distribution within the context of an apparently bullish backdrop. Yet the preponderance of bulls suggests that the bullish backdrop will not end overnight. The market may continue to be under distribution while going up marginally. My expectation is that the current market behavior will continue for a period of weeks to a couple of months. There is bullish seasonality to contend with (remember the term “Santa Claus Rally”?). During this time, the positive breadth will continue to deteriorate as there will be additional sectors and stocks moving through a downward trending 50-day moving average. In the beginning of ’10, a significant correction or worse will occur.

This analysis would be shown to have been incorrect if last week’s highs (S&P 500 level of 1100) were decisively taken out to the upside along with an improvement in the price/volume trends.

10:38 AM  
Kris said...

The weird thing is this, with the severe drop happening last year. The markets seems to forget there are some fundamental issue not yet resolved like dropping housing prices and UMEMPLOYMENT in the US!!

But with DJIA reaching 10,000 in 2009. It seems we are back to the point where the super rally begun in 2005 that reach a peak of 14,000 around 2007.

9:42 PM  

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