Stock Market Rally Ahead Says Market Timer Frank Kollar

October 31, 2008 (FinancialWire) (By Frank Kollar)

Last week the stock market stood at the abyss. The intra-day lows reached on October 10, at 839.80, were all that stood in the way of a second market meltdown.

But those levels held and this week the S&P 500 Index (SPX) looks ready to rally. Monday’s huge advance on the NYSE was on better than 16 to 1 up vs. down volume. Single day volume surge levels of better than 9 to 1 have precluded most bull markets in the past when such an event occurs twice in a short period of time. The first volume surge occurred on October 16, only two weeks ago.

The rally also posted a new volume record. The highest NYSE volume in many years. Record gains on record volume.

The Federal Reserve has again cut Federal Funds rates, this time to an historical low 1.0%. They say never fight the Fed. More importantly, after 40% stock market losses, the markets have been flooded with cash, rates have been drastically cut and now the indexes are responding in typical bullish pre-rally patterns.

You can bet against it, but it would be just that…a bet. How high the rally can go remains the big question and our charts show initial resistance all the way up at SPX 1073, a 12% rise from Thursday’s close.

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.

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.

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