Ready to
Bounce
By Duru
January 9,
2005
I was
scrolling through some charts of the major indices this weekend and was struck
by the near uniformity in last week's sell-off. All the major indices that I
follow sold off to similar support levels. The exceptions are quite notable…
and disconcerting. Recall that the market's main excuse for the weakness was
that the Fed has become a lot
less friendly toward the speculative excesses in the market. This portends
a Fed that will be relentless with interest rate hikes, and a Fed who will
finally begin to defend the dollar again. Gold has been a big loser of late and
commodities in general have been taken out of their leadership position. The
stock market in general though is proving somewhat resilient and now looks
ready to bounce. I am still inclined to think we have seen the market's highs
for a while, so I suspect any bounce we do get will be a temporary salve on
trader's and investor's wounds. The main storyline that could "save"
the market are corporate earnings and forecasts that are either well above
expectations or are either so bad that folks will think things cannot get
worse. Either way, January should continue to be a stomach-churner.
I present a
bunch of charts below with some commentary to tell the rest of the story.
Be careful out
there!