A forecast update from Harry Dent Jr., of HS Dent Investments, suggests that we may have seen a short-term market top as of July 23, 2009. Depending on downward market movements from here, we may have seen a long-term top, but more than likely, it is just a short-term top. Dent has previously forecast a possible run-up to Dow 10,000 – 11,000 depending on market conditions that will play out over the next month or so.
It is possible we saw a top in the markets yesterday. The markets broke up above strong resistance at 958 – 960 on the S&P 500. However, they are too overbought to likely continue to move upwards.
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If the markets break back down below the breakout point of 958 – 960 on the S&P 500, that would be the first sign of a further decline. A break below 945 or 8,800 on the Dow would raise the chances we have seen a short term and/or longer term top.
My comments:
We should see a strong move one way or the other next week. As discussed yesterday in Grab Your Profits in Asia, the short-term trend seems to be to the downside for now, as the US Treasury is preparing to sell $250 billion in Bills and Notes. It is likely that the money to fund these purchases will come from the broader financial markets.
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