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The Stock Market Rally
The rally in the UK market has continued but is now at a level and time when it should react and retrace. It is the extent of this expected retracement that will be a really strong signal for the return of a 'bull' market (or otherwise). The US market has also now started to catch up with the UK but is still some way off giving any buy signals. The Overall Market Rating (OMR)* of the FTSE 350 has climbed over recent weeks and has now entered 'bull' territory with the FTSE 250 index showing an OMR of 58% (although the FTSE 100 OMR is only at 41%). But, as we comment in our Stock Markets Review (4th May), this is only an 'in prospect' 'bull' signal as we must wait for the expected retracement and then evaluate the strength of any 'buy' signals that might then shine forth. To jump in to the stock market and buy shares now might just invite suffering whipsawing losses as the share prices take a downturn. And, make no mistake about it, a downturn in share prices is not only due (this rally has extended to its 9th week and no previous rally in this downtrend has lasted more than 8 week) but is required in order to confirm the indications that the trend has changed and the market is going to go up. We know that Spring does increasingly appear to have sprung and that there are plenty of green shoots around but we really need to advise caution just for a week or two longer until the expected retracement has happened and run its course. Then it may, repeat may, be the time to metaphorically 'fill ones boots' with red hot buy-signaled shares. We know that the market has gone up a lot and most people are wondering if now is the time to buy stocks. But it isn't. Not yet. Soon maybe. * The Overall Market Rating ('OMR') is a proprietary trend indicator of ShareHunter.com ShareHunter - For The Best Stock Trading Alerts From ShareHunter you will - You can request expert technical analysis of your shares - #Alan_Saunders |
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