By Dick
Arms
RealMoney.com Contributor
11/26/2008 6:50 AM
EST |
The "Paulson effect"
still seems to be with us, but it is losing its effectiveness. In recent weeks
Henry Paulson has seemed like the stock market's own Typhoid Mary. Every speech
has been followed by a plunge in prices. But yesterday the response was far more
muted. It looks as though underlying market strength is starting to emerge.
After a rise of almost 1,000
Dow point in just two days, a rest was to be
anticipated. The fact that it has been so contained is, in itself, encouraging.
Last week I was saying that the drop through the Oct. 10 low, while
bothersome, seemed to be finding support. The subsequent sharp rise makes the
validity of the double bottom look even more believable.
The very oversold shorter-term Arms Index moving averages have moved away
from their extremes but are still oversold enough to suggest that the advance is
going to go further. The longer-term Arms Index moving averages are still very
extreme, and this bodes well for the longer-term outlook.
It is early, but it looks as though we may have turned the corner.
To view a larger version of these charts (in some browsers), after
clicking on the "larger image" link below the chart, mouse over the lower-right
area of the chart until the icon with four arrows appears. Then click on that
icon.
| Arms Indices |
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