Friday, October 17, 2008
preliminary credit market thaw?
what might that mean for equities? there's still a long row of recession to hoe, but a rally soon is becoming more likely. the newsletter for this week mentioned that all three major preconditions for a bear market low are now in place, but that will not in and of itself prevent further declines -- oversold can get more oversold. while recent selling has been intense, there's still little evidence that supply is exhausted. an october 13 90% upside day was almost immediately followed by the october 15 90% downside day. it further noted that the incredible peak in new lows seen on in the last week, on the basis of history, is of the kind that likely precedes the final price low by anything from a few weeks to a year. expect a retest at minimum.