Whitman gone bullish? Sell the rally! <ggg> I think we had about 1160 new lows in Oct. 1998, the highest level since Oct. 1987. We completed the minimum expected move for a bear continuation yesterday, so 2530 would not be a completely unsatisfactory place for a bottom. It's also a good place to end for one other reason: it was just about at this level that new econ investors decided the Fed was irrelevant. <ggg> Record volume on the NYSE, just short of that on the COMPX; however, a lot of that came in the last hour or two, when the market was on its way back up.
On the bearish side, we pierced some major supports on the SPX and Dow yesterday; at a minimum, the market should be viewed as unstable for the next few days. The PC ratio peaked at the open and declined steadily the rest of the day. If we continue down through 1300 or 10,300, I'd say the bottom is not in.
From a value point of view, it's one irritating place to end: old econs have gotten too expensive to buy, and techs haven't gotten cheap enough. MSFT is a buy here based on its historical valuation, but I already own plenty of that. And it filled only part of the 53 gap, so we could yet see that number. Given that the futures are weakening, a retest of 2530 may be in order. |
