Tuesday, July 24, 2012

No more trend line guidance

The S&P 500 index has violated both of its converging medium-term trend lines, thus precluding any short-term forecast.

If you suspect as I do that the S&P 500 will top out around 1550 for a third time before plunging again, then any rally from this point would gain ~15% at best. Is it just me, or does that seem like a small reward given the downside risk of a collapsing global economy?

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