Runaway Stock Markets Relentlessly Moving Higher

By: Frederic_Simons

Are you waiting for that pullback to get into stocks ? Nervous of missing out ? This is what a lot of investors certainly feel like. For several stock market updates, we have told subscribers repeatedly what we think about the recent strong upmove and its psychological implications:

"In fact, for those not in a long position and waiting for pullback to jump aboard, any further increase in prices adds to the existing psychological pressure to join the party. This could be a reason why every little pullback during the day is bought, pushing prices to new highs every day. Secondly, there may well be several consecutive weeks of  rising equity prices. Rising prices tend to result in a positive feedback that leads to prices climbing even higher."

Today, we would like to add: 

...And if a sizeable pullback should finally occur, it might not be a pullback that you should buy, but the next powerful downleg  in this bearmarket. So be very careful with trying to "buy the dip". Imagine how many "sitting on the sideline investors" would be hit if they try to buy a "healthy pullback", which then turns out to be the downleg to new bear market lows in the S&P.

The next two charts present the longer term charts for the S&P 500 and the Nasdaq 100 Future. They look absolutely bullish, with very little retracements. The price pattern we have seen today (rising upward consolidation) could actually be the beginning of an explosive short covering move to the upside which might mark the end of this move higher. 

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The shorter term charts look similarly strong. The recent trend has not let prices touch the red line, not even in this short timeframe.

The next chart shows the NQ Future 3500 Tick chart for the full recent upmove. Impressive.

As a conclusion, the stock market remains in its strong uptrend, with the line of least resistance pointing to higher prices. Be careful with buy a "dip" if it should finally occur, as it might turn out not to be a dip, but the next bear market downleg.

If you have any questions, please do not hesitate to contact us by writing an email to

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By Frederic Simons

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© 2009 Copyright Frederic Simons - 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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