Tim Reazor
Chief Investment Strategist
NorAm Asset Management
Da Nyet, Navernoe is Russian for yes, no, maybe, which describes this market to a tee. Will this market go higher? Yes, no and maybe.
I think this market is going to correct. That doesn’t mean it will, I just think it is going to head lower. We’ve come up against resistance too many times and haven’t plowed forward. Eventually, like the pop-top on a can of soda, if you bend it up and down repeatedly the metal wears thin and breaks. Every time we come up to resistance on the S&P 500 and Nasdaq and failed to break through we’re one step closer to correction. Here’s why…
Every attempted rally takes energy (institutional volume). Every time we fail and have to reattempt a rally we need more and more energy, but every reattempt actually has less energy because institutional enthusiasm wanes. Eventually the attempted rallies are so putrid that it’s just easier to fail.
This is where I see us sitting in the markets – attempting to break through, but even a “good” jobs number couldn’t get the rally ignited on Friday… so this week it will take even more energy from a very tired and energy depleted group of institutional investors to get the job done. And this I feel is not very likely.
Now add in the stress of Russia and Ukraine and the pop-top gets even weaker.
To listen to my extended thoughts on the markets click here – http://www.thewallstreetshuffle.com/ My radio show from this Saturday contains my longer form thoughts on the market, my watch-list and my rules for investing.
My weekend update video brings my thoughts to life pictorially. Click here to watch – http://vimeo.com/93677920
If you’d like to talk about rule based investing, where the markets are headed or if you would like to join us for our trading / investing open house please email me – Tim.Reazor@NorAmAsset.com
Best Regards,
Tim
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