Sunday, November 06, 2005

Quick Thoughts


The S&P500 broke through staunch resistance last week when it surpassed the 1215 level on higher weekly volume. The nasdaq composite followed suit gaping higher through trend channel resistance. From a technical perspective this market wants to move higher.

As I wrote in a previous post I expect there to be an elevated degree of market volatility as the smart money rotates out of their bond positions and into other asset classes. The change will unlikely occur suddenly, however, "market mood swings" are likely in the short term.

Quick Thoughts

We continue to carefully shift into new positions as the earnings outlook for 2006 shifts. We remain neutral on the general market at this time due to the changing nature of our Key Market Factors. That said, a move to lower oil prices and flattening rates could signal excesses in the economy have been lapped up giving the smart money the ammunition it needs to buy more stocks. If the latter case comes to fruition we would expect the S&P500 to rise 5-10% as it catches up with the rest of the world; and the nasdaq composite to do better. Anticipation of lower energy costs and flattening rates would signal to us a buying opportunity is at hand, thus causing us to accelerate or our purchases.



Think fast

9:44 AM  

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