2008Jan11

Posted January 9th 2008

"Buy when there are sellers and sell when there are buyers."

That is an old saying but still applies today. Of course it works best in hindsight when it can do little practical good. However, if you watch and read charts you can 'see' and 'feel' when the sellers are in charge and when the buyers are in control. At this time the sellers have the upper hand. Every time the market tries to stage a rally sellers flood in driving stock prices back down. At some point, and we are approaching that point, the trend will change. Until then be cautious.

Stock prices are looking more and more attractive. Valuations are excellent in many stocks. World growth is strong and likely to stay that way. It is our economy that is suspect. We are going to get more bad news in the financial sector, but look for hints of good news in that area. That might be our first signal that the end of the bear phase of the market is near.

We will likely get a short term bounce up, but it might be a 'Bear Trap'. That's a short term bull market to get people in stocks only to have the sellers take charge again.

We need a better picture on the economy before any strong moves should be made.

Good Trading

Steve Peasley

source: http://investtalk.com/marketcommentaries.asp