Caution is warranted now

• Posted by vinaydh
• on January 21st, 2010

I was worried that all those looking for 1160+ may get trapped and my worst fear has come to fruition. I have gone bearish thrice since the March’ 09 bottom and was forced to retract back in a week or two. Every time it felt different to me but it eventually turned out to be a buying opportunity but this very well can be different.

Jan’ 09 also started with a bang to give way to a stunning reversal that took S&P below 700 in a month’s time. That reversal was quick and swift and this too has been swift so far. The volume is ramping up on down days and leading stocks are showing serious fatigue. This rally may have still further to go but in the short term it has hit a brick wall. Time to at least go on the side lines if not downright short. Levels to watch on the down side are 1110 and 1090 and on the upside 1130.

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