Best Financial Markets Analysis Article Yesterday's action in the stock market did not inspire much confidence. While the DJIA finished positive, buyers were not rushing into the market to buy stocks. Rather, it was a half-hearted attempt to keep the DJIA above the November low.

The DJIA finished just 3+ points above the November low. It is difficult to imagine that the bears will not try again to push below 7552. As for the S and P 500, while it has some room to run before testing its low, it is important to note that it is currently below the 61% Fibonacci Retracement, meaning it will likely continue downward.

One positive sign is that the McClellan Oscillator is reaching oversold territory at 70.41. But as I have said time and again, oscillators can stay oversold for long periods of time.

The market action over the past year demonstrates why buy and hold does not work. It was a great idea when the market was in bull mode almost twenty years, beginning in 1982. Clearly, that bull market is over. That is not to say a bull market may spring up at some point, but it may be a long time before any of us see Dow 14000 again. Now is the time to either be short or stay in cash.

Positions: None

By Kingsley Anderson

http://tradethebreakout.blogspot.com

Kingsley Anderson (pseudonym) is a long-time individual trader. When not analyzing stocks, he is an attorney at a large law firm. Prior to entering private practice, he served as a judge advocate in the U.S. Army for five years and continues to serve in the U.S. Army Reserves. Kingsley primarily relies on technical analysis to decipher the markets.
Kingsley's website is Trade The Breakout (http://tradethebreakout.blogspot.com)

Copyright © 2009 Kingsley Anderson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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