While I’ve known of DeMark for quite a few years, I’ve never studied his system – so his talk is all Greek to me (and to the Bloomberg folk who tend to interview him). That said, there is some institutional money that pays a lot for his advice, and his recent track record seems to be quite good. If that is any indication Santa Claus will be very good to the bulls, as DeMark says his system signaled the strongest buy signal in 40 years Thanksgiving week, and investors should be long until the 21st when the S&P 500 will get to 1330. But he says this is all within the context of a bear market – so back to bearishness after.
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- The Standard & Poor’s 500 Index (SPX) may advance to between 1,330 and 1,345 this month before the rally reverses, according to Tom DeMark, the creator of indicators to show turning points in securities.
- That would represent a rise of at least 5.9 percent for the benchmark gauge for American equities after the worst Thanksgiving-week drop since 1932 depleted sellers, said DeMark, whose prediction in September that the S&P 500’s decline would stop at 1,076 proved prescient when the index bottomed at 1,074.77 on Oct. 4.
- This month’s rally will end when the S&P 500 closes higher on four successive days, DeMark said.
- “I had the strongest short-term buy signal I’ve recorded in 40 years” during the week of Thanksgiving, which fell Nov. 24, said DeMark, the founder of Market Studies LLC, in a phone interview. “It’d be an explosive move to the upside.”
- DeMark, who has spent more than 40 years developing indicators with names like “sequential” and “countdown,” said on Oct. 25 that a rally by the S&P 500 above 1,254 would “trap” bulls. The index peaked three days later, then dropped 9.8 percent through Nov. 25.
- “The market should top out around Dec. 21,” DeMark said today. “The market rhythm and market balance equilibrium all require the market rally. Once that’s completed, the market will have a vacuum on the downside and we should have a sharp decline.”
- DeMark, an adviser to Steven A. Cohen’s SAC Capital Advisors LP, provided consulting to hedge funds including George Soros’s Soros Fund Management LLC and Leon Cooperman’s Omega Advisors Inc. Advisors Inc.