Bull Rally Steam Running Out, New S&P Targets

March 25th, 2009

I don’t know if it was the overbought indicators that caused yesterday’s selling or if that was just happened because the market needed it anyways. In any case, after pushing close to their highs, the market sold off in fairly orderly fashion throughout the rest of the afternoon. Volume wasn’t too heavy, and there wasn’t anything overly alarming about the action to scream “crash.” My internal indicators (funny feeling type stuff) are still of the mind frame that we are way overbought. So, I’m pretty confident another explosion higher won’t happen anytime soon.

 

As for the downside target, I’m more interested in a general pullback lasting a couple days making its way to the 750 level at the least. People have become quite bullish out there – practically ever newscaster and commentator out there said SPX fair value was 900. A correction to shake the market’s confidence is more than needed. Then we can sit and watch as all the bullz climb the slippery wall or worry. Be patient out there with your shorts. We just went through a couple weeks of easy trades. Now we have to wait for the charts to re-set.

  • Share/Bookmark

Comments are closed.