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Strategies & Market Trends : TheWallStreetInvestor.com
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To: Jeff O'Brien who wrote (3313)12/10/2005 6:32:57 PM
From: Rarebird  Read Replies (1) of 8382
 
>>A couple more days should give some DIRECTION I imagine.<<

This market reminds me of December 1994. Rising rates kept the market flat that year. And then the Fed indicated that it was finished raising rates. Wow did these markets take off! A soft landing was achieved. Sure, GDP slowed quite a bit, but a recession was avoided. 1995 was the beginning of a great 5 year advance.

The odds favor the same scenario playing out here from 2006-2010. But before this can play out the Fed has got to signal to the market that it is finished tightening. The "direction" you are looking for will come from the Fed.

These markets are definitely a bit spooked about higher interest rates and I can't blame them one iota. The last time the Fed went on a tightening binge, the economy went into recession.

The current market environment is quite a classic bull/bear fight. However, the technicals should be taken quite seriously here; for the S@P has been consolidating for the past 2 weeks above the decisive 1252-1254 level, which represents the 61.8% retracement level of the decline from March 2000 to October 2002. What we got here, technically speaking, is the equivalent of "Custer's last stand" from a Perma Bear point of view. Once the S@P decisively breaks above the 1275 level, it's lights out for the Bears and these markets rock to the upside.

Trade the Bear. But invest in the Bull and Diversify.

It's a Bull Market till proven otherwise. Confirmation of the type of Bull is coming shortly.

I'm long and in these markets.
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