The attached chart shows the 3 month T Bill Discount Rate(IRX) vs stocks(SPX). The Disc rate falling as demand for T Bill is huge. The previous two times (1998, 2001) there was a flight to safety of this magnitude stocks fell just as hard. But not in 2007, or NOT YET. So either Tbill will reverse or stocks will ? What say yee !! My bet is that stocks will join the 3 month T Bill trend, other evidence is the massive volume on the last two down trends of $SPX and the divergence on advance and decline shows that trend will be down, very soon ? UPDATE: Previous thread SP500 technical warning here: http://www.elitetrader.com/vb/showthread.php?s=&threadid=111533
my thought is you will not see the stocks really start giving it up until after the new year as most money in the market is not traders like most of us here, they're investors. and as we all know, investors worry about the lttle things like taking taxes this year or next. based on this assumption, january will be an ugly month with many an investor looking to lighten their load.