Best Financial Markets Analysis Article Models have indicated, for several weeks, that an advance in the equity markets during March could be expected. The positive news from Fed chairman Mr. Bernanke and Citigroup today has provided the trigger for that bounce. Technically, this upward movement is considered to be a bear market rally and is part of the on going milder downward trend in 2009. As the next major low is expected in June, this bounce should fade by mid-to-late April or before.

Though major lows can be forecasted mathematically, the strength and duration of an advance can never be quantified. Should this rally continue into late April or early May, then the June low will likely be shallow. However, if the advance weakens earlier (late March) then the June low is expected to be deeper.

Investment approach: Traders may wish to look at leveraged bull ETFs to capture some of the anticipated increase in indexes. Mid-term investors may use this bounce as an opportunity to sell into strength and increase cash positions. Longer-term investors should remain on the sidelines until October.

Your comments are always welcomed.

By Donald W. Dony, FCSI, MFTA c
www.technicalspeculator.com

COPYRIGHT © 2009 Donald W. Dony
Donald W. Dony, FCSI, MFTA has been in the investment profession for over 20 years, first as a stock broker in the mid 1980's and then as the principal of D. W. Dony and Associates Inc., a financial consulting firm to present. He is the editor and publisher of the Technical Speculator, a monthly international investment newsletter, which specializes in major world equity markets, currencies, bonds and interest rates as well as the precious metals markets.

Donald is also an instructor for the Canadian Securities Institute (CSI). He is often called upon to design technical analysis training programs and to provide teaching to industry professionals on technical analysis at many of Canada's leading brokerage firms. He is a respected specialist in the area of intermarket and cycle analysis and a frequent speaker at investment conferences.

Mr. Dony is a member of the Canadian Society of Technical Analysts (CSTA) and the International Federation of Technical Analysts (IFTA).

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