No change in bias

• Posted by vinaydh
• on January 18th, 2010

I still think that this market will see 1160+ before we see a 5+% correction. But there is also a possibility that the market might trap all those who are thinking the same way. Next two weeks will be dictated by the earnings results. If 1160+ coincides with AAPL earnings or tablet event then it would more than likely be a sell the news.

This rally has still room to go further both time and price wise. The new highs and lows as well as the cumulative A/D readings support the view that any sell off in the near term will just be a speed bump on the way to higher prices. I am not in the camp that thinks that the market would roll over from these levels. Market has not given any signal of that yet. I think one of the reasons behind the resiliency of this rally has been this skepticism on the part of believers as well as non believers of this rally. Non believers do not believe and believers desert at the first sign of trouble. This has been one frustrating rally for the majority. Bears are not getting any respite and bulls are getting whipsawed by market antics.

BTW Prechter is preaching 200% short again. He is out with a target of Dow below 1000 some time by early 2011 and 400 by 2014-15. I do think that there will be a significant retracement of this rally at some point of time but can’t fathom this deep a retracement and that too starting right here. No point in trying to over think the market right at this point. If Dow indeed is going below 1000 then one will have all the time in the world to get on board.

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