As we move forward with some possible volatility for stocks, always keep in mind the year to date index growth figures. The COMP closed 2005 at 2205 and opened at 2216. That would mean +10% for 2006 would put us above 2425 (we are now almost +12%). The area between 2380 and 2400 better be supportive if we are to maintain double digit appreciation this year. The bear camp will point out that S&P earnings growth was 8.5%, which could endanger the double digit prospects. SPX is currently up 12% for the year. NDX closed Friday at +10% (that lag with the broader market is an ongoing bearish story which bulls need to correct quickly: blame the semis). Nevertheless, just looking at the overbought conditions of the current rally can make one forget the larger picture. Once the year closes, however, there will be little support for stocks and I expect January to be particularly bearish if we do not alleviate the present euphoric conditions in December. Investor bull/bear ratio is now at trend line resistance: Link.
This entry was posted
on Saturday, November 25, 2006 at 11/25/2006 06:19:00 PM.
You can skip to the end and leave a response.
» Post a Comment