The upside down head & shoulders I’ve been writing about looked promising a few days ago, but the last two days have wiped that out. So, what’s next? A triple bottom. We’ve had the double bottom (looking at intraday lows). Perhaps we’ll have a triple bottom. I think we’re forming a range. Now, it won’t be perfect. We could go to new lows and then race back up. We don’t know. But, it looks as if we’re in a range now that is very wide. On the Dow, it’s in the low 8000s to the mid 9000s. Quite a range but that’s what we have. Volatility still persists as does the whipsaw risk. I’ve been whipsawed in the last few days. Fortunately, I continue to play small. My overall allocation is about 20-25%. I’m still concentrating on buying more bonds than stocks right now because those deals won’t last as long.
For now, let’s be a little more patient until once again the market proves itself to us. I think we’re getting oversold in the short run and we have a good chance of rallying next week. Time is on our side as well. 12 out of the last 14 years have had a positive pre-Thanksgiving week rally. Now, I’m not a seasonality guy, but we’ll take anything we can get right now.
