Wednesday, November 05, 2008
The stock market has been in dire straits for months now. Stock Trends gave investors a Bearish marker over a year ago when the Stock Trends Bull/Bear Ratio turned sour for North American stocks. Since then the stock picking vitality of Stock Trends has been sedated. The growing number of bearish stocks has been the prevailing current. Presently, 82% of North American stocks are categorized as Stock Trends (strong) Bearish. Until the market bottoms and starts to generate a shift in intermediate-term trends, there will be a bias in the Stock Trends analysis to stand clear of the volatility and wait for for improved sentiment. This approach keeps investors from benefiting from gains achieved by successful bottom-pickers, but minimizes the risk in making such a call. Trend followers cannot take aggressive stances against a prevailing trend - it is antithetical. Still, technical traders make money and names for themselves when they can pick a market bottom. The pattern showing in recent weeks shows stratospheric volatility slowly giving way to a more shapely consolidating figure. If the SPDR (AMEX:SPY) maintains the $84 support level over an extended period there is hope for a rally for short-term traders. For the bulk of investors, though, SPY will have to scale past $115 before they come out of hibernation.