Quarterly Market Brief
by Christopher M. Quigley, B.Sc., M.M.I.I., M.A., WealthBuilder.ie | June 2, 2009
Print
While from a classic Dow Theory position the markets are in a bear market rally, from a technical position bull momentum indicators are very strong. Both the Dow Transports and the Dow Industrials, on a three day chart, have both indicated phased supportive movement with higher highs and higher lows. More significantly the increases are advancing from solid base positions which is granting the market solid technical structure, something it did not possess since the third quarter of 2008. Given this strength the markets can readily advance another 20-30% before the issue of a "new bull market" is addressed. Clearly until the banking system and the real estate market is repaired there will be no new "bull" economy. What actually transpires remains to be seen. The most likely outcome is that the pure energy of momentum will propel prices forward until either the market or the economy "blinks".
It is highly likely that the price of oil, rising inflation, on-going banking problems and a collapsing dollar will bring the reality of the bear economy into focus. When that occurs there is a high probability the shorts will pound the market down, testing former lows. Please remember that the market pulses down in sharper design that up.
Copyright © 2009 Christopher M. Quigley
Editorial Archive
contact information
Christopher M. Quigley, B.Sc., M.M.I.I., M.A. | Dublin, Ireland | Email | Website
The opinions of FSU contributors do not necessarily reflect those of Financial Sense.
