I was surfing around last night and found this interesting article from Kevin Haggerty on the TradingMarkets.com site. TM was one of the first websites for traders and originally had some great articles and courses on trading but has recently become uninteresting and mostly unhelpful as they started stock contests for Playboy Playmates. They do have a nice stock screener but then again who doesn't?Anyhow, Kevin is looking for some weakness and then a nice rally into year end. He was the head of trading at Fidelity for several years and has written at the TM site for many years. I have no idea about his record but his take kind of coincides with mine through year end:

"There is no edge for traders right here, as yesterday was the 5th day off the 11/28/06 1377.83 low, and there is a negative momentum (5-RSI) divergence. The internals remain short-term overbought as the 4 MA's of the volume ratio and breadth were 64 and +1101 on Monday, declining yesterday to 60 and +819. The 5-RSI closed at 73.83 versus 92.26 at the SPX 1389.45 high and 86.04 at the previous 1407.89 high on 11/22/06 (see chart). The Federal Reserve and the Working Group on Markets (PPT) will do their best to keep the markets from any significant decline while the US dollar remains under pressure. Also, the generals have every incentive to mark-up what is a very good 2006 with the SPX +13.3% year-to-date. Any short-term weakness into mid-December will reverse to the upside. However, for you and I, the numbers only count when you book it or lock in a certain percentage of your gains."

I love the "working group" comments or the PPT aka The Plunge Protection Team. For those that don't don't know, there are many theory's that the Fed/Treasury buys or gives money to foreign governments to buy stocks "in size" when they fear a major dip in markets- hence the Plunge Protection Team.


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