Don’t Chase The Rally

From Michael Kahn’s Jan. 19 column at Barron’s:

It appears the stock market is finally firing on all burners despite a raft of problems still facing the global economy. … But don’t get complacent or enthusiastic about this rally. While stocks have pushed above short-term technical resistance levels, they are far from being in the clear. And I see no reason to alter my longer-term analysis that pointed to a tumble into the middle of the year. … Market cycles point lower while the ratio of buying-to-selling pressure suggests inherent weakness. The current short-term rally … does not look sustainable. It may be premature to sell the market, but preserving capital is still a good idea. Better buying opportunities still lie ahead.

From Anthony Mirhaydari’s Jan. 18 column at MSN Money:

It’s a false dawn not unlike the one seen in early 2008 before the meltdown started. The volatility behind all this is set to continue for at least a year. The good news is that we could see the return of a 1980s-1990s style secular uptrend for the stock market as soon as 2013.

From Mark Hulbert’s Jan. 18 column at MarketWatch:

Bullishness over the last 106 days has risen more rapidly than was the norm from past bull markets. … It’s worrisome when 3 out of 4 sentiment measures suggest that the bulls are jumping back on the bullish bandwagon at such an above-average pace. They reinforce the picture of complacency that the sentiment data have been painting in recent weeks.

This entry was posted in Stock Market Forecasts. Bookmark the permalink. Both comments and trackbacks are currently closed.


  1. Chris
    Posted January 21, 2012 at 5:29 am | Permalink

    Did you delete all of the comments on

    From Sunday’s Kelly Letter on 1/17/12?

    They are all gone now.

    • Posted January 21, 2012 at 9:43 am | Permalink

      We’re redesigning and moving things around. Comments are now per article, and we’re moving general discussions to the new Forum section where they’ll be easier to find, track, and so on. I hope to get historical comments left from the former general home page comments section into the new forum. I’ll post an article once the redesign is done. Thanks for checking!

  • The Kelly Letter
    A Complete Investment Management System
    The Kelly Letter  every Sunday morning by email.
    Like no other. Many subscribers say this is the best read of their week, astonishing in its ability to distill seven days of noise into one succinct overview of the very few items that might matter. Start your Sundays right!
    A one-page Quick Start Guide
    with page number references to full information in The 3% Signal. You'll receive access to this right away so you can begin transforming your portfolio into a performance machine immediately.
    The 3Sig Calculator.
    A thing of beauty! You'll use it to generate your own personal signals every quarter including exact share amounts to buy and sell based on your account balances. It emails you the results to make later quarters easy by keeping last quarter's numbers at your fingertips. Some subscribers say this tool alone justifies their subscription price.
    The subscriber-only section of this website
    where likeminded investors are commenting on notes and discussing in forums. Jason joins these interactions every day. They're a treasure trove of investing tips and wisdom.
    The archive of Kelly Letter notes.
    It’s a research center, searchable and smartly tagged to make gathering time-stamped material on covered subjects easy.
    The subscriber podcast.
    Jason reads every letter word-for-word. This feature was requested by subscribers who prefer audio learning. They listen on their Monday morning commute, during a workout, or while reading along at their computer.

    Save 17%

    Pay as you go
    Or sign up to receive free email and learn more about the system.
Bestselling Financial Author