Sunday, October 24, 2010


The stock market has been climbing for two months now, with the S&P 500 index forming a rising channel pattern.

There are reasons to hope for further gains: stock market sentiment has not yet reached optimistic levels, and there have been several occasions in the last century where long-term market rallies began in or near October of a mid-term election year.

On the negative side, price patters like the one the market is in now are typically violated by a price downturn, which could happen at any time. And of course the dividend yield of the S&P 500 - now down to 1.95% - is just getting worse as the index climbs.

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