I’m very impressed with the strength being exhibited by the S&P 500 (and the Dow). The S&P has been able to hold the support of its November highs while the NASDAQ has been sliding away. Like I mentioned a few days ago, it appears that a rotation into big cap stocks is occurring. The NASDAQ was able to find support today at its middle Bollinger Band and bounced back into positive territory. The result of that action was a nice little shakeout of some longs, possibly trapping some shorts and creating a good number of hammers in NASDAQ stocks. So it seems like in the very short term the path of least resistance is up. Things should be a lot clearer after the big unemployment report tomorrow morning.
Apropos of nothing, but I learned of two people getting laid off in the past 24 hours in completely different places. And that other local employers (Bay Area) are still laying people off. One of these jobs was a way-senior guy in a tech firm who kept his job all through the crash.
I’ve learned the folly of calling tops and heeding the bears when the market’s going against ‘em, and maybe what I’ve seen is isolated, but I can’t help wondering if something’s brewing.
Having said all that: some chartists I’ve seen have noted that in previous crashes … Nikkei and Dow ’29, there’s been a 50 percent retrace of the highs about three years out; any kind of similar action here suggests a Naz of 2500 before the bear returns.
Couple other wise folks (navellier & brinker) expect this rally to last two years.