Thursday, January 19, 2012

That's more like it.

It's safe to say the S&P 500 index has officially broken through the declining tops trend line.

In addition, the long-term market trend is completely bullish for the first time in 6 months.

The problem is that other indicators are quickly reverting to more optimistic values that are more typical of market tops than market bottoms, so this rally could be over not long after it's begun. Notice in particular how little volatility there's been in the past couple of weeks. No, I'm not going to jump into any bull market funds any time soon.

Saturday, January 07, 2012

Breakout?

The S&P 500 index has crossed above the multi-month declining tops trend line - albeit hesitantly:
I'll be more confident about this breakout if the S&P passes 1285, the highest mark in over five months.

As for the long-term forecast, nothing has changed. The stock market is highly over-priced by historical measures. The dividend yield of the S&P 500 is a paltry 2.1%, and it simply cannot and will not remain that low forever.