CALDEIRÃO DE BOLSA

In the December issue (12/4), Dr. Edward Olmstead and his team said they expected the market would remain strong into January with a significant top beginning to form in a 4-8 week timeframe. In the January issue (1/8), Dr. Olmstead set an intermediate-term target of 285 for the S&P SmallCap 600 (SML). That forecast appears to have been accurate. The SML tagged 286 and the bullish seasonal and small-cap bias has now begun to fade. The seasonal winds of February and March tend to blow much colder. In fact, it appears the intermediate-term correction we have been waiting for has finally arrived. On the bull side of the trade, in this climate breakouts will tend to be less successful and dip-buying will be a safer strategy.