Monday, 28 January 2013

Bears Rejoice. Red SPX.

We had a red day with SPX and Dow but Nasdaq was green.
Obviously, all the financial bloggers are feeling happy because they can see the next crush just round the corner. Yet it was not even 3 points down. At this rate, unless something unexpected happens, January barometer will be positive.

So we have a positive Santa Clause Rally, The First Five Day was positive and most likely we will have the whole month of January positive. What does the past statistics say for that?
Well, I have this chart from Stock Trader's Almanac.

S&P 500 SCR, FFD & JB Positive 1-Year Pattern since 1950 Chart

There is still plenty of time for things to go wrong and I do not recommend to buy in equities now because to move higher, we need a good pullback. My point is: a big correction is not the end of the world.

VIX raised its head above the water but I do not think it has completed its downward journey yet. May be soon and then bears will rejoice.

Let us therefore take things as they come and not have a pre-conceived notion as to how the year will end. Its been just four weeks out of 52 and lots of ups and downs will come. As of now, I see indices moving sideways and even making a higher high, before the fat lady sings.

Have a great evening folks. 

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