Rally Killer Weather? Asks Market Timer Frank Kollar
May 11, 2007 (FinancialWire) (By Frank Kollar)
Record flooding in the Midwest. Severe storms and killer tornados causing widespread damage. Fires in Georgia, Florida and California caused by dry weather and high winds. Now the first tropical storm of the season hovering off the Atlantic coast, three weeks before hurricane season even begins. Although the stock market has been almost unstoppable of late, Thursday’s pullback could be a sign that traders are starting to recognize that there are chinks in this market’s armor.
Retail sales are already being hurt by higher gasoline prices. Also, homeowners who cannot pay their mortgages are unlikely to be spending as before. Add to this fears that buyers will also be adversely affected by weather emergencies seemingly popping up everywhere and you have the potential for a weak retail sector and at least short term selling in the stock market.
In this momentum driven bull market, one day of selling does not kill an advance. In fact, Thursday’s decline only took prices back to initial support levels. For the S&P 500 Index (SPX) that is 1488. For the Nasdaq Composite index (COMPQ) it is 2533. But if we see another one day sell off such as Thursday’s we could finally be in for a long overdue correction.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
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