The way the markets close today a little inauguration rally can be expected. The 815 test we had been expecting has hold for now. That is nevertheless only a short upleg and will be followed by a drop below 800 sometime soon even the next week as the earnings season gets rolling and as a matter of fact the financial situation worsens on a daily basis at banks even with taxpayers money been thrown at them without any brain. The problem is that the real economy gets the full impact as well now and earnings will deteriorate further and the valuation is not accordingly. We need to drop between 30- 50% to reach fair value.
Friday, January 16, 2009
SPX tech update
The way the markets close today a little inauguration rally can be expected. The 815 test we had been expecting has hold for now. That is nevertheless only a short upleg and will be followed by a drop below 800 sometime soon even the next week as the earnings season gets rolling and as a matter of fact the financial situation worsens on a daily basis at banks even with taxpayers money been thrown at them without any brain. The problem is that the real economy gets the full impact as well now and earnings will deteriorate further and the valuation is not accordingly. We need to drop between 30- 50% to reach fair value.
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