Thursday, November 29, 2007

Is that the Bottom?

Howard Lindzon is calling a bottom in the stock market here. Is this the bottom? My model appears to be exiting the noisy conditions that made using it almost impossible and is now giving a much clearer signal. Expect some downside starting most likely on Monday. It is also signalling that we remain oversold not overbought. Conditions look very similar to early August where a consolidation in the market was followed by a plummet to the final lows on August 16th. This could happen and looks like the likeliest scenario to me and is supported by a lot of other stuff I am seeing. But this could be the bottom. We'll only really know when the next low occurs next week - will it be a higher low or a lower low? In the meantime enjoy the rally :) The fundamentals behind this rally are supposed to be the investment by Abu Dhabi in Citigroup and the possibility of rate cuts. Both facts show that things are very bad but help is on the way to stop them getting even worse. The fact that Citigroup needs this capital injection on such bad terms is very bad news. But I guess the market thought that things could be worse and noone might come to Citigroup's rescue.

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