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-- Posted Monday, 2 March 2009 | Digg This Article | Source: GoldSeek.com
The DJIA is down about 250 points as I type. For the first time since this “once-in-a-lifetime” bear market began, the “Don’t Worry, Be Happy” crowd who continously appear on CNBC and the CNBC personnel themselves (including the eternal bull Dennis), have a very concerned look on their faces. Maybe it has to do with the likelihood that the CNBC personnel’s 401K are full of GE stock (their parent company) and they finally have concluded it’s a bear market (Please don’t include Charlie, Rick and “The Brain”. They’re the only worthy voices). Ironically, this comes at a crucial junction IMHO. While the fundamentals and technicals are absolutely atrocious, I’ve just hit the single most oversold point on my technical system that I’ve used for nearly 25 years. Look at the DJIA chart above. Not only did we break a 12+ year uptrend line, but also key support between 7200 and 7500. One could make an argument that there’s no real support until at least 6500. After that, it’s around 5500. So what’s a growling bear (since October 2007) like me to do? On one hand I have the single strongest short-term oversold indicator ever. Second, from some point here and a few hundred points below, the likelihood is we rally back to former key support (80%+ chance historically) between 7200-7500. If so, one then watches to see if it breaks through because that would be a good indicator we may finally be in what the bulls have been calling a bottoming process for over a year. But there’s also an argument that we can still fall to as low as 5500, especially knowing how bad things are fundamentally. Again, what’s a person to do? I could say enough is enough and begin a “scale-down” buy program if I believe the world as we’ve known it is still here a few years from now. Hmmm???? Stay tuned because I am. Peter Grandich is Chief Commentator for AGORACOM.com, Canada’s largest online small cap investment community. Read and respond to his blog at http://grandich.agoracom.com/
-- Posted Monday, 2 March 2009 | Digg This Article | Source: GoldSeek.com
Peter Grandich is the Managing Member of Grandich Publications, LLC (www.grandich.com).
The company publishes The Grandich Letter (first published in 1984) which covers the metals and mining industry, follows world markets and economies, and covers the Canadian markets from an American prospective.
Grandich also provides a variety of corporate finance and development services to publicly-held companies.
Peter Grandich is also the Managing Member of Trinity Financial, Sports & Entertainment Management Company, LLC (www.trinityfsem.com), a Registered Investment Advisor in the State of New Jersey. Trinity provides investment advisory services to individuals, small to mid-size businesses, professional athletes and entertainers.
Peter is a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.
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