Today's Comments (Short Term Outlook)                             Printer friendly

Bear market rally, or bottom? On Friday I was speculating that we could see a pop and a drop after the jobs report.  We saw the early pop, and then a drop - but then the market surprised me by finishing near the highs of the day. One day chart (Friday) of S&P 500...            Now the market, in particular the S&P 500, is back into a resistance area and the rally could have some problems going forward.  We could see 1410, or even 1430 if the neckline is penetrated to the upside, but it should start getting tough to move higher from here.                              Chart provided courtesy of www.decisionpoint.com  The PMO indicator is showing a buy signal and during a bull market that is a good sign.  But in a bear market, this could just be an overbought reading, as we saw in early December. The recent rally off of the low now has the NYSE as overbought as almost any other time in the last few years.  If we are truly in a bear market, stocks should not be able to keep up this pace and we should see selling kick in again.  On the other hand, if the bottom is in and we are not going to get a retest, great!  But that would defy the odds.                                 Chart provided courtesy of www.decisionpoint.com  The TSP Talk Sentiment Survey came in at 40% bulls, 48% bears for a 0.83 to 1 bulls to bears ratio last week keeping that system on a buy signal and a 100% S-fund allocation.  Bottom line:  If we are in a bear market, then we are in a relief rally that is handing us a good opportunity to sell.  Of course there is a chance that we have seen a bottom and the next bull run is about to start.  The odds are against that so I remain very cautious at this time. That's all for today.  See you tomorrow. Have questions?  Visit our message board for answers.  Would you like to be on our email alert list?  We will send you an email when there is a change to our asset allocation or market outlook.  Your email address will never be given out.  Read our privacy policy.  By signing up you agree to the TSP Talk Terms of Service.  More details below **. Are you bullish or bearish?  Join the Weekly Sentiment Survey. Like what you're reading?  Tell a Friend about us.