7500 was last November’s bottom and it will be this rally’s major resistance level. Caterpillar (CAT) just announced 2400+ layoffs and small companies are cutting left-and-right. How can ANYONE other than a financial organization see this as an “upturn market with light at the end”? In my opinion this is the classic short squeeze as this is all that is left for the hedge fund boys and girls. Some money is trickling in from the sidelines but nothing substantial as the volume is way to light. When the market gets euphoric because the housing numbers are better than expected and it is due to a huge increase in apartments, well lets just say I wouldn’t be getting long here. Since March 9, stocks have gained in five of six sessions, with the S&P 500 rising 15%.
“This is very much a bear market rally and I think most people agree that at some point, we are going to need to retest those lows,” said Drew Kanaly, chairman and CEO of Kanaly Trust Company.
“At some point we are going to have to start looking at the earnings and that’s probably the next turning point,”
I’m surprised that we rallied today. I knew we would have a sharp rally from the s&p low of 666, I didn’t think we would still be going up. But I now think we will continue to rise because of the fear, people will have on missing out on this bear market rally. But look out longs when the reality of this economy sets in. Wait until the people stop paying their credit cards, the price of bank stocks don’t have these losses priced in yet. I feel we will go back down to low 600′s before we see850+.
Very good points Mike. I keep wondering if I am missing something but I keep coming back to just a bear market rally. Q1 can’t be good so why would we be rallying now other than we were over extended downward. Don’t get me wrong, i love making money long but there is no way this can last much longer. Dow 7500 max , 800 max on the S&P.
Have a great night