Wednesday, 29 July 2009

Perma-Bears Turn Bullish

If the market was indeed the vicious beast that I described in the beginning of this column, having hurt the bears so much, it now seems likely to go after the bulls …

The trap is set. A lack of follow through, a turn on a dime and a decline in line with fundamentals is all that remains.
The best way to accomplish that is for the S&P 500 index to rise above the June high of 956 and set up an even bigger bull trap!
In doing so, the charts would show an accomplished bottom formation signaling the rally to endure. Bulls would feel vindicated and start buying. And many of the remaining bears would be forced to retreat and abandon their short positions.
Thus the trap is set. The only thing remaining now is a lack of follow through, a turn on a dime and a decline in line with fundamentals.
Claus Vogt, Money and Markets
22 July 2009

Last Thursday, the S&P 500 index rose above its June high. In doing so, it’s showing an important bottoming formation: A huge head and shoulders bottom. Rising volume and strong market breadth confirmed the buy signal. Additional proof came from foreign markets showing more or less the same bullish pattern. And from the 200-day moving averages, which are in the process of turning around as well.
I take these signals seriously. They’re telling me to expect a continuation of the bear market rally off of the March lows.
I deem it probable now that this rally will have legs. And I expect the markets to keep rising and not come under serious pressure again until the second quarter of 2010.
Claus Vogt, Money and Markets
29 July 2009

It is rare to see. Money and Markets 'experts' used to lead the subscribers to a loss, there is a high probability they are wrong this time, too. I recall they advised to sell at all recent bottoms, in October, March and July. They have no respect for waves, sentiment, they only stick to their understanding of fundamentals. Following their advice seems to be one of the quickest ways to lose money.