Bear Rally Fading

2/10/08

The Dow recent bounce from Jan lows to around resistance 12750 rally has been fading. So is the Nasdaq index and as well as the S&P index. This is it the final piece confirmation US stocks are trading in Bear Market. US economy is for sure into recession even President Bush & some Fed members said we are not going into any recession at all lately.

Technically speaking, when market is rallying we need more stocks marking new highs or higher highs. For meaningful bulls rally, 50+ new highs daily would do the magic, and 100+new highs daily would surely make the market in "momentum" to catch on to generate new index higher. But, the number of new highs for the US stock markets has been below 50 since the end of November 2007 and just hitting 9 new high on trading date 2/6/07 where is the end of the recent bear rally tops.

Some investors are saying that they are buying "bargains" now. They are cheap "now" if the underlying technically and fundamentally conditions are met to show a support for a new upside rally. Otherwise, bargains are likely to loss additional value and become better bargain tomorrow. So, my advise is do not buy or go long to any stocks at this moment since we have no clear picture (technically and fundamentally) that US would get out of the recession yet.