The Next Opportunity
The market now appears to be in the midst of it’s 2nd bear market rally. Or is it? Some people are feeling confused.
After the Dow hit another lower low a couple of weeks back the following question occured to me – what level would be seen as the beginnings of the long equity-led road to recovery? Closer inspection of the current toing and froing shows quite uniform reaction to support and resistance levels. The 1st bear market rally died at 9,400 resistance. This week ended with the market breaching the 8,600 level. A move above 9,000 next week would surely mean a worthwhile bet on a move towards 9,400.
The reaction to consumer data next week should be followed closely; a sanguine reaction to the surely inevitable bad news will be taken as a sign the market thinks it has priced in the slowdown, over the Christmas period at least. A negative turn and it’s back on the look out for a lower low, most likely.