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Monday, May 18, 2009

Has the bear won?

From WebSurfinMurf's Financial Blog

I really wanted to create a post stating the Bear market is here, watch out! I am betting this is the case, and we are going lower from 5-8-09 highs.

Last week broke the bull week over week gain for the last 9 weeks. My only hesitation with all this bearish talk is the graph below. The 200 DMA, 2009 high, and the bull trend line up all converge this Friday or following Monday. I could see the market rallying to this point again THEN the market falls apart.
So although the Bear has broken the Bull run this past week, one week doesn't make a trend change. Unfortunately when trying to establish a bear position in a bear market rally, there never seems to be a good time. I already picked my timing, from about 5-8-09.

My friend John Chinnock makes a great point for the bear market, do you think the market will be "kind" enough to rally to allow the bulls caught buying at 5-8-9 highs to sell? The market does tend to "take" money from those who stayed too long in the game, and any bull in the market after a 40% upswing in 9 weeks deserves to get pinched.

But if the market makes one more shot up before collapsing, the lottery tickets should get hurt very badly. I'm hoping the established shorts will not make any significant gains, due to their charts already looking over-extended up.

Gold has been doing fantastic. This translates into pretty good move upward for gold miners, including GDX. My gold miner positions where established long ago, and I'm not selling a single one for years.

NONE of this bull/bear talk changes the next 4 week outlook for the markets, which is down from these levels. So if the bulls get one more push up, try to minimize any panic moves before the bear trend resumes. Establish stops now, when your head is clear to avoid an emotional reaction to a rally.

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