Friday, November 26, 2010

Abigail Doolittle: The Triangles Say It's a Bull Market

In her latest report, Abigail Doolittle, founder of Peak Theories Research, writes:

- The so-called bull market sectors appear to headed toward the auspicious Ascending Triangle pattern while the bear market sectors may be headed toward the negative Descending Triangle pattern.

- In other words, investors seem to be favoring those sectors that tend to do well in bull markets.

- The financial sector, however, continues to buck the rally ride as it is now caught in a confirmed Descending Triangle.

- Small and mid-cap stocks also seem to be favored by investors at this time and this too points to the possibility of a continuation of the cyclical bull market born last spring.

- The S&P itself, however, appears to be caught in the more ambiguous Symmetrical Triangle pattern and this uncertain picture may be pointing to something interesting.
What I am taking from Abigail's report is that stocks that perform well in a Bull Market are performing well now. This suggests that the early stages of Bernanke's QE2 is having an impact.

1 comment:

  1. Bull markers require increasing economic confidence and certainty. From everything I have read thus far, neither exist. Secondly, how on earth do you have any kind bull market without the financial sector coming along for the ride?

    Of course none of this means that the markets cannot cycle higher, but its doubtful those gains will hold for all that long as the economy at some point will come upon that can we've been kicking down the road since 1930.

    One last thing, what happens when all those dollars sitting offshore come ashore to chase this bull market?