For your words to hold any weight, "we" should put your money where your mouth is.
I am long with S&P.
Edit 4Nov2010: Heeelllooo, what happened to your technicals? The S&P is now 1197, the chart never bothered with 1165 - it just whizzed past it, then retraced to bounce off to 1197.
Bloomberg News, sent from my iPad.
S&P 500 Has Limited Room for Gains, UBS Says: Technical Analysis
Sept. 29 (Bloomberg) -- The Standard & Poor's 500 Index has limited scope for further gains as it heads for the biggest September rally since 1939 and may fall more than 4 percent if a support level is breached, according UBS AG technical analysts.
Michael Riesner and Marc Mueller wrote in a report dated yesterday that the U.S. benchmark index could reach 1,165 before the current advance ends, a 1.5 percent gain from the last close. The S&P 500 rose 0.5 percent to 1,147.7 yesterday as investors speculated the Federal Reserve will buy more debt to safeguard the economy.
We "wouldn't chase the market on a broader base, and if so, we would apply a very tight money management, using last week's reaction low at 1,122 as a trigger to sell, short or protect positions," the Zurich-based analysts wrote.
The S&P 500 has rallied 9.4 percent so far this month, poised for its biggest September increase since 1939, as concern eased that Europe's debt crisis and U.S. unemployment will derail the economic rebound. The gauge could fall to 1,100 if the 1,122 low is breached, a 4.1 decline from yesterday's close, according to Riesner and Mueller.
"We continue to see the risk of the market correcting into late October or early November, but given the current strong rally this potential correction could be just another pullback within the sideways trading range of the last few months," the analysts wrote. A correction is often defined as a decline of 10 percent or more.
Riesner and Mueller also said that the VIX Index "suggests that the upside from here will be limited." The VIX, as the Chicago Board Options Exchange Volatility Index is known, has lost 13 percent so far this month, erasing August's 11 percent surge. The index measures the cost of using options as insurance against declines in the S&P 500.
In technical analysis, investors and analysts study charts of trading patterns and prices to predict changes in a security, commodity, currency or index. UBS is ranked as the top bank for equity technical analysis and charting according to a 2010 Thomson Extel survey.
To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net .
To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net .
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