Much Reading and Studying

So, after much reading and studying this weekend I have come to the following conclusion regarding the markets, for the short term. Short term I mean the next week or so. So what did I finally decide?

That the markets will be up. Unless they go down.

Yep, the signals on the charts are unbelievably mixed. There are dozens of indicators out there. And depending on which ones are your personal favorites you could definitely build a case to be bullish or bearish for the short term.

My gut says down, which isn't good for me because I went long on Friday.

What I'm hoping for (and if you depend on "hope" when you're trading or investing, you're on the wrong side of things) is that the G20 have something positive to say (which is highly unlikely) or maybe GM will get salvation, or the CPI and PPI come in looking good due to commodity prices having dropped which will give a false send of glee.

I guess we'll be dependent on news items for right now. And options expiration is coming up on Friday which makes for a turbulent time. Maybe that's why the indicators are so mixed. Too much going on.

In any event, as always, we have to wait and see.

As far as the medium term, the next 3-4 months, I won't be surprised by a rally. One of those rallies I've been talking about that happen and will be impressive. Here's my theory as to why...

This past Thursday was a major flushing out of people that had been watching the 840 level on the S&P. Breaking below it, ever so briefly shook a lot of folks out and it caused a lot of automatic sells. The rally could have sucked some folks back in but then late Friday the freefall should have scared people out. Now the time is ripe for a sizable rally. People won't believe it for a while, won't get in. When it keeps running, people will pile in... and then yes, the evil market will reverse itself.

Conspiracy theories, right? :-)

Nah, just the way the market plays the game.

How's this for a case of deja-vu... In October 1929 amidst the declining stock market, John Rockefeller announces that he is buying up blue chip stocks in large quantities based on their attractive pricing. The Dow at that time was at 195. The Dow bottomed in 1932 at 42.

How's this for a case of deja-vu... In October 1929 amidst the declining stock market, John Rockefeller announces that he is buying up blue chip stocks in large quantities based on their attractive pricing. The Dow at that time was at 195. The Dow bottomed in 1932 at 42.

Sound familiar to what our modern day Rockefeller, Mr. Warren Buffett said last month?