Imminent Reversal, Now?

A couple weeks ago I mentioned that a reversal was imminent. Because it took so long to form I suspect that anyone who reads this blog thinks my prognostication skills are a bit week. I am not going to argue that. Prognostication is not omniscient foresight. As time goes by the forecast changes.

So here is the forecast now. The imminent reversal is happening now. But this is happening not on bad news but on good news. New home sales are rising for the first time in months and consumer spending is higher than expected. Some companies are even posting profits that are significantly better than those from this time last year. So why is this reversal happening? I have two words for you. Profit taking.

After all these months of investing in these companies. The investors are selling to get their ROI. But what does this mean for the market? It simply means this. What I expected as a significant reversal may not be anything more than a strong pull back. I am suspecting a 'ball-park' pull back to 8800 for the Dow, 1850 for the NASDAQ, and 950 for the S&P 500.

I am currently still holding on to a stock position as well as a put position on Nova Gold (NG). The stock is still profitable and the put is in break-even territory for now. We will see how that goes.

That is my opinion, you can take it or leave it.

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