In his article: 10 Bullish Charts, Signals, Indicators, Barry Ritholtz gives 10 compelling technical reasons why were are close to a market bottom. I completely agree with his assessment as I stated in my prediction for the market bottom, we are close.

Notice I said CLOSE! I know today was an 11% bounce, and everyone is feeling giddy, but listen closely…

Friday, 10-10-2008 Was Not The Market Bottom!

Today’s huge gain is a great place to get short weaker markets. Look for stocks that bounced up near resistance, and then get short!

The Trend is Always Your friend

And the trend is still down. The following is a weekly chart of the S&P 500. Notice the 50 / 200 week ma cross, and the old support line becoming resistance. I’d expect the S&P to to continue through the 1000 level tomorrow before running into heavy resistance between 1050 and 1075.

S&P 500 trend is still down - Click To Enlarge

Another Thing Barry and I Agree On

9.  S&P500 is down 47% from its peak level one year ago. Transports are down 38%. These are relatively rare degrees of loss, and suggest a near term upside move.

Interestingly enough, we both came to the same conclusion using different models… The transports are due to  bounce and lead the market back up.

Last 5 posts by Steve Warshaw

• Hot Stock Pick: Short Apple (appl) - November 18th, 2008
• Comcast (CMCSA): New Short Pick - November 11th, 2008
• S&P 500 Forecast for 11-10-2008 - November 9th, 2008
• How To Trade Crude Futures - November 3rd, 2008 - November 4th, 2008
• S&P And Industry Group Wrap Up - 11-3-2004 - November 4th, 2008