Last month we discussed keeping an open mind and not getting caught up or blinded by ones own forecasts, analysis or opinion, especially when it pertains to the ever-fickle stock market. Despite our belief and projection since our 2010 Annual forecast made in December 2009 that the market would rally and stall near Dow 12,000 and then succumb to a mild-to-average bear market, correcting 20-30% from the high to the low in 2010, we remain prudent and alert for signs that this may not transpire.
Four weeks later we find our concerns rekindled and our bearish analysis somewhat more validated. The rally off the June 7 lows has lacked conviction. Volume has been unimpressive and price action weak. Volume generally tapers off this time of year during the Worst Six Months, but this provides little solace. Our Seasonal MACD Sell Signal have been issued and if seasonality prevails, as we suspect it will in 2010, this typical decline in volume will be accompanied by a decline in stocks and the major stock indices.
But before we run through some of the issues that concern us with respect to economics, geopolitics, fundamentals, technicals and internals; let’s remember that while we remain prudent and defensive, an excellent buying opportunity is setting up. Since 1914, from the midterm year low (like 2010) to the pre-election year high the Dow has averaged a 50% gain. Our complete latest analysis has just been released to subscribers. (Source: STA'2010)
Happy Investing^^
Disclaimer ON!!!
