Daily Investment Interpretations

January 27, 2011

.2011-1-27 (Thursday Afternoon): The indices continue to defy the law of gravity, as the Dow and the S&P 500 continue to bump against resistance at 12,000 on the Dow, and 1200 on the S&P 500. They continue to be overextended, but as Lord Keynes famously said, "The markets can remain irrational longer than we can remain solvent." The Dow keeps penetrating, or bumping against the 12,000 level only to be pushed down again. Ditto for the S&P 500. So how will this turn out? Probably after bouncing against resistance for a while, the buyers will exhaust the sellers, and the indices will move higher. Then, when it's least expected, when the bears have finally said, "Aw, shoot, there's nothing  standing to stop these markets now until we get three percent higher," and have invested their money, the indices will gradually drift lower and lower, followed by a plunge that harvests the maximum amount of money from bulls and bears alike as the markets correct.