Thursday, July 26, 2007

 

Crash Alert

As I mentioned on Tuesday, a crash alert was close. It seems like when the market moves through important support or resistance levels it moves with a purpose and that is what is happening today. Mr. Market is telling us that the 2003-2007 bull is over. Don't doubt it.

Crashes are very rare and I am not saying this is going to happen this week but I not saying it isn't. What I am saying is that over the next few months we better be very cognizant of the fact that the market looks weak. I am suggesting you take a bearish posture and to start looking for resistance levels which are higher prices which would cause us to believe the bull has resumed or that a totally new bull has begun. That is what I will work on next. That entails looking at the structure of the decline and that will depend on the baby. ;-)

P.S. We are seeing a significant flight to quality into U.S. treasuries and the dollar has firmed up a little.

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