Broad Market Ready for Trend Change Yet?

From a psychological perspective I am thinking the market will not get the real correction going until right after new years.  This market has evaded almost every possible bearish technical signal up to this point that it is hard for me to believe the REAL correction is going to happen in December. No way. 

I say no way, but of course anything is possible. 

But the market has evaded triple bearish divergences, volume sell signals (by the way there is another bearish volume signal that occurred on the thanksgiving half day trading day even though it was an abbreviated session.  The market has also evaded the monthly price bar reversal that occurred in October.

So for me to sit here and tell you that the market is going to fall apart in December I think is wrong headed.  Yes I am seeing weakness in a bunch of other indices such as the financials XLF and the Russell 2000 Index and a few others.  But the Sp500 is just drifting sideways and once again is not showing any ease of movement to the downside yet.  I suspect that this Dubai headline stuff is just a distraction and could end up being the pivot point of some type of blow off upside rally into the end of the year.

On the other hand it is also true that I am seeing weekly bearish MACD crossovers on many indices except the SP500 and the Dow Industrials.  So the weeklies are showing good portions of the market being tired and in sideways to sideways-down trends.  But again, I suspect that ‘they’ will hold the market up until the end of the year.

There are still plenty of decent buy setups in this market if you look carefully enough.  A lot of stocks have crumbled and failed but a few good survivors still have nice setups such as the YGE I posted on previously.

So why worry about Dubai and the broad market when you have a possible YGE monster coming down the pike ?

Oh by the way I forgot to post this interesting interview by David Bensimon.  He has some very interesting perspectives on gold and the broad market now that I think are worth listening to.  It seems that a good majority of the opinion out there right now is that gold is going to the moon while the broad market will either underperform or go back into a severe bear market.  But Bensimon takes the view that ALL markets are going to power much higher in the years ahead.  I think it is a good idea to keep your mind open to several different possibilities and make your final decisions based on levels that are either broken or violated and then take it from there.  Bensimons view actually matches my own in that I think after some type of 10 to 15% correction in the first part of 2010 the market will eventually power much higher possibly back to the year 2000 highs.

Posted in Index Trading, Market Timing, SP500

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