Year-End Rally Is No Sure Bet By Gary B. Smith
12/13/2002 07:55
Oh boy. Maybe my prediction of an up finish for the last two weeks of the year is going to fall by the wayside. As I pointed out, the next two weeks are normally very bullish. (In 25 of the past 30 years, the S&P 500 has moved up in the holiday period.) But, as of the close Thursday, the pattern is looking fairly bearish. How so?
We've just experienced a healthy pullback, but instead of bouncing off the uptrend line, we've moved sideways into a small triangle. Now, it's not a certainty, but the resolution from a triangle that has formed amid a downtrend is usually a further move down.
Of course, this is all wait-and-see kind of stuff, as seasonality might assert itself with a resolution of that triangle to the upside. If so, great, although any sharp move up would likely set us up for a sharp move down in January.
So maybe it all boils down to when we take the pain: now or in January. Not sure it matters all that much, but I do want you to be prepared. |
