The oncoming rally discussed in recent Stock market posts
has turned into a rocket off the deep oversold mentioned in
the 11/18 post. At 1507, the SP500 faces trend resistance up
around 1520. The market is mildly overbought, but the
trajectory is too strong, indicating a chase to get in.
Players are betting heavily on a minimum 25 bp cut to the FFR%
at the 12/11 FOMC meeting and like the "freeze" on many sub-
prime ARMs announced by GWB / Paulson, because it will likely
stretch out the drain on lender capital over several years.
Some time over the next week or two there should be a sharp
downdraft as short term players take some chips off the table
and leave investor resolve to be tested.
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