Ian Woodward's Investing BlogGoldilocks is dancing!
Goldilocks is still dancing and prancing with Rumplestilskin around the Bonfire. All the recent song and dance about sub-prime rates going to pot seems to have run its course for the moment and has temporarily run out of steam. Wonders never cease when the Retail Stores report indicated that the losses were not as high as first expected and triggered a 328 point rally on the DOW. The next day the Retail Stores were reported to be at their worst in two years, but the market still went up since the other euphoria was the Earnings reports were expected to be better than expected.
I emphasize again that the work I have done on the QID/QLD total dollar ratio has recently reached new high levels indicating to me that the pessimism is so high that the old adage of “the stock market climbs a wall of fear” is still in play. We have not yet seen the super optimism which is indicative of a Blow Off Top. Having blown through resistance after a triple top we must now see if it was a quick short term covering phenomenon and fall back into the base or a continuation up for that final blow off.
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