Sunday, January 25, 2009

Two days and two broken trend lines

The S&P 500 index broke through a declining tops trend line one week ago Friday, which is normally a short-term bullish indicator. However, on the next trading day it broke through a longer-term support line at the 816 level, which is a bearish indicator.

All things being equal, the latter bearish break is probably the more important one. Of course, that's a safe call for me to make given that money flow and breadth are mildly bearish, that sentiment is still mildly optimistic (bearish), and that the long-term trend is a bear market.

I remain 75% in GRZZX and 25% cash.

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