Safehaven | Stocks Rolling Over Again | Printer Friendly Version

December 21, 2005

Stocks Rolling Over Again
by Charles Meek

Dow Jones Industrial Average   10,838
Value Line Arithmetic Index   1,915
30-Year Treasury Yield (TYX)   4.65%
20+ Year Treasury Bond Price (TLT)   90.70
Gold 1/10 Ounce (GLD)   $49.95

The Big Picture for Stocks
The short, intermediate, and long term pictures are all negative.

Technical Trendicator (1-4 month trend):
Stock Prices   Down
Bond Prices   Up
Gold Price   Up

Two out of three of our primary sentiment indicators for stocks are at levels that usually portend an intermediate downtrend. Coupled with that, the market is overbought and rolling over to the downside. (See our chart below.) In addition, the 4-year cycle for stocks is negative into 2006.

This is a combination of factors that puts a significant decline highly probable, in my opinion.

While I do expect the January bounce factor to move selected oversold microcap stocks on our Special Situations list to have tradable rallies over the next month, the broad market should be avoided.

Regards,

Charles Meek
MeekMarketModels.com

Mr. Meek is a Registered Investment Advisor and editor of MeekMarketModels.com.

MeekMarketModels does not guarantee the accuracy or completeness of this report, nor do they assume any liability for any loss that may result from reliance by any person upon any such information or opinions. Such information and opinions are subject to change without notice and are for general information only . In making any investment decision, you will rely on your own review and examination of the facts and the records relating to such investments. Trading the market is extremely risky. Our suggestions are often very speculative and not suitable for many investors. Past results are not indicative of future returns. Meek Market Models, Inc.