Disclosure: This newsletter is not a means to solicit any of the securities mentioned nor does it recommend it for any person before they speak with a licensed professional investment advisor for their own suitability. Investing in Equities bears risk of capital loss. This newsletter is strictly the opinion of Jason Tillberg, President and founder of Tillberg Capital Management, Inc. and shall not be held responsible for investment loss from this newsletter.
Substantial Bear Market Rally Imminent!!
The stock markets are simply exhausted from selling pressure. Nearly every market crash has its bear market rally and I think the time is very near for a substantial bear market rally in the US markets and markets around the world.
I'm looking more so at US markets.
From looking at the technical levels of the Dow Jones Industrial Average, it appears now to be the most oversold in the last 40 years at least.
Below is a chart of the Dow Jones since 1971. The 3 charts below the Dow chart are all indicating deeply oversold levels when this chart is drawn up.
This is a long term chart and gives us a perspective of just how far we've come down and how extremely oversold we've become relative to the last 40 years.
The following chart is a 1 year weekly chart I created. (All charts made on www.bigcharts.com)
Also very oversold currently and due for a break out.
On a more short term chart of the DOW, a 3 month chart below we can see that we are at the begining of an upward move.
The thesis is this short term move up could lead to a more greater force in buying that would get the weekly technical indicators to point up that may even get the monthly techincal indicators to go up.
A rally in the magnitude of 30% - 50% is not unlikely if this is the case.
These techincal indicators are like a rubber band that gets pulled up or down before the force is so great that it needs to snap back in the other direction.
I'm no technical analysis expert and I don't believe technical analysis is fool proof. Most certainly it's not. But what is does is help give reason for events to occur with more probability.
These charts are just for the Dow Jones. Many stocks are so dreadfully oversold now, a dramatic melt up is possible.
There are many other reasons out there to be both bullish and bearish; anything is possible.
February 26th, 2009 By Jason Tillberg