(snip)After the market blew down through important long-term support last week, this week we have gotten a nice oversold bounce back into the resistance (formerly support) zone. This rally is most probably driven by short covering, and we have to wonder how much more of that demand will be triggered to keep the rally going. On problem now is the heavy resistance barrier, formed by a convergence of trend and resistance lines, easily seen on the chart. (snip)
(snip)Assuming that 2009 earings come in close to the estimates, valuations will still not be so great (estimating a P/E of 23.2 in 2009 Q4), but I am not inclined to put much faith in the estimates. There is still so much bad news in the economic pipeline, it is hard to imagine what earnings will look like a year from now. (snip)
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