Market Between Rock & Hard Place Says Market Timer Frank Kollar

February 6, 2009 (FinancialWire) (By Frank Kollar)

The S&P 500 Index (SPX) has been trading mostly sideways since early December 2008. Huge daily rallies look like potential breakouts, but they are then followed by just as huge declines.

Since early December, the SPX has broadly traded between 920 on the upside, and 800 on the downside. That is a fairly wide range, but there is a tighter range since early January, and that is 875 on the upside and 800 on the downside.

Sideways markets are frustrating and typically result in losing trades for those who attempt to trade them. It is best to await a breakout.

But sideways markets never last long. There will be a break one way or the other, and it will likely be explosive considering how long the markets have been held in check. A break below SPX 800 will quickly result in a test of the bear market lows at 752.44. A close above SPX 875 will result in a run to SPX 920.

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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