Monday, April 4, 2011
Great short term rally in need of a pullback/pause?
Very strong rally in the past 10+ days usually a very good indication of further upside for the next 6 to 12 months (or at worst, limited downside from the March bottom level.) While the major indexes have moved up strongly... Dow, SP500, and Nasdaq, there were some technology sectors that lagged or gotten hit to the downside such as networks and semiconductors. So while the long term view (6 to 12+ months) is still bullish for the stock market, the short term (from a few days to a few weeks) is due for some pullback. For the medium term (1 to 3+ months), the recent very strong rally has a history of being forwardly bullish but I would still be cautious of a bigger pullback or even a retest of the March lows if the pullback is more than +3%.
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