Equity Market Comment - 6/24/2008

The cash S&P 500 has reached the wedge downside target that I had discussed last week and has done so in a manner that is consistent with the current move being over or very nearly over.

With this in mind, if you have had put options or short positions in place for this decline, now is a good time to take your profits on them and simply sit on the sidelines until we get a stronger confirmation of this move lower being over. When we get this confirmation, then aggressive short term traders can look to establish long positions for the forthcoming counter trend rally.

Intermediate and Long Term traders should remain in their extremely defensive posture as this bear market continues. During the course of this bear market we will have periods of rally and at times very sharp rallies that begin to fool the masses into thinking the worst is over. Of course once we get a vast majority of players believing that this is the case and positioned on the long side of the market, we will know that another sharp leg lower is in the mix.