Market Rally – the Real McCoy? Asks Market Timer Frank Kollar
March 20, 2009 (FinancialWire) (By Frank Kollar)
The S&P 500 Index (SPX) has risen a remarkable 17% since its bear market lows, reached on March 9, though it pulled back a bit on Thursday March 19. Is this, finally, the start of a new bull market?
There are several indicators that suggest we have a great deal of upside ahead.
Last week we had two trading days of better than 9 to 1, up vs. down volume. These are bullish indicators, especially if there is more than one such day in a short time span. These breadth surges were also unusually strong. 27 to 1 on March 10 and then 19 to 1 on March 12.
Remarkably, we had another breadth surge this week, with 10 to 1 up vs. down volume on Tuesday, March 17. Three such days in only two weeks is very unusual.
Then, according to Elliott Wave Theory, we appear to have just completed a Wave 5 on March 9. Wave 5’s are usually the bottom of a series of waves to the downside. This forecasts an entirely new sequence of waves to the upside ahead.
Sentiment is inconclusive as the CBOE Volatility Index (VIX) did not make new highs when the SPX made new lows on March 9 as would be expected. But historically, the VIX is at high levels, in the 40’s, so it is difficult to get a read on this.
It looks like the real McCoy this time, but traders should remain vigilant. Bear market rallies have a way of looking good before the axe falls
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.
Go to previous Press Releases & Trading Notes.
Note: These Press Releases are short term in nature. They may or may not reflect the same position as current subscriber reports which typically have longer time frames.
© Copyright 1996-2009, Kollar Market Analytics, Inc., All Rights Reserved.
FibTimer reports may not be redistributed without permission. These Trading Notes however may be distributed without permission.
Disclaimer: The financial markets are risky. Investing is risky. Past performance
does not guarantee future performance. The foregoing has been prepared solely
for informational purposes and is not a solicitation, or an offer to buy or sell
any security. Opinions are based on historical research and data believed reliable,
but there is no guarantee that future results will be profitable. |
