...von www.ingerletter.com:
Technically . . . we've indicated that the January lows would come out, and (especially on hourly hotlines this week) that the gap to watch dated back to last Fall in the March S&P around not the 200-day Moving Average everybody was watching, but the 1340's that represented the explosion to the upside (gap up, which never really looked back until this month) back in October. We said we'd be less worried once that gap was filled. Guess what? That's likely to very soon occur now.
However, that doesn't mean that ultimate lower numbers couldn't be seen; and much can surely be accelerated if some of the rumors of hedgers (boy have we warned about those guys) really are hurting; although some of that is excusatory from the mass of analysts who totally missed the forecast decline...
The pattern we have seen has fulfilled every aspect of the forecast here; which included a head & shoulders patttern (or inverted soup bowl if you prefer). Poor breadth, slower rates of growth of profits (not the same as slow growth, which statistics say is not occurring) and a warning here about General Electric (GE) loosing its status weeks ago, have all been well described. Sure; a forecast for February overall will generally have to await early week action; though for now we're thinking in terms of a washout, small rebound (not much Window Dressing at month-end, but at least a little), then knee-jerk decline possible to the FOMC, which we suspect will be bought, with a rousing rally in the stock market, heralded by already strong bonds (long end delighted to see a short-end pressed), preceding a capitulation phase that leads later to a Spring rally affair, and then we'll see. For the S&P, initial goals have to be the gap in the 1340's; not all that far away.
If we then rebound and fail to take out the 1430's (not as impossible as some might think), we're going to then be considering oversold weekly conditions later this Winter in the 1290 area or so. That's on-hold for now, pending what type of success an expected daily turnaround can deliver. If the yield curve becomes permanently altered, then the era of low short-term rates is history; as the Treasury buyback of late can tend to support long-bonds without much help to note markets....
Technically . . . we've indicated that the January lows would come out, and (especially on hourly hotlines this week) that the gap to watch dated back to last Fall in the March S&P around not the 200-day Moving Average everybody was watching, but the 1340's that represented the explosion to the upside (gap up, which never really looked back until this month) back in October. We said we'd be less worried once that gap was filled. Guess what? That's likely to very soon occur now.
However, that doesn't mean that ultimate lower numbers couldn't be seen; and much can surely be accelerated if some of the rumors of hedgers (boy have we warned about those guys) really are hurting; although some of that is excusatory from the mass of analysts who totally missed the forecast decline...
The pattern we have seen has fulfilled every aspect of the forecast here; which included a head & shoulders patttern (or inverted soup bowl if you prefer). Poor breadth, slower rates of growth of profits (not the same as slow growth, which statistics say is not occurring) and a warning here about General Electric (GE) loosing its status weeks ago, have all been well described. Sure; a forecast for February overall will generally have to await early week action; though for now we're thinking in terms of a washout, small rebound (not much Window Dressing at month-end, but at least a little), then knee-jerk decline possible to the FOMC, which we suspect will be bought, with a rousing rally in the stock market, heralded by already strong bonds (long end delighted to see a short-end pressed), preceding a capitulation phase that leads later to a Spring rally affair, and then we'll see. For the S&P, initial goals have to be the gap in the 1340's; not all that far away.
If we then rebound and fail to take out the 1430's (not as impossible as some might think), we're going to then be considering oversold weekly conditions later this Winter in the 1290 area or so. That's on-hold for now, pending what type of success an expected daily turnaround can deliver. If the yield curve becomes permanently altered, then the era of low short-term rates is history; as the Treasury buyback of late can tend to support long-bonds without much help to note markets....
