For insights we turned to Jeff DeGraaf, ISI Head Of Technical Analysis Research. He’s the #1 analyst in his field as ranked by Institutional Investor magazine.
According to DeGraaf, the market probably climbs for about the next two months. That’s right – he says we’re going higher for the next 60 days.
That’s because the charts suggest we’re in the middle of a great big bear market bounce, according to DeGraaf. “We’re setting up for one of the biggest bear market bounces that we’ve seen over the last 100 years,” he says. "Spring is going to be a decent time for equities."
But DeGraaf also tells us this is not the beginning of the next bull and that means at some point the market should turn lower, again.
What should you watch?
“One of the keys as we climb is to look at the percentage of issues above their own 50-day moving average," he says. "When it gets to about 80% pull the rip chord and start re-asserting the bear trend and get short again.”
What's the trade?
In the near term DeGraaf suggests playing the technology sector which looks best from a technical perspective. And he says "healthcare might suprise for 2009 as a pretty decent place to be."
For more of DeGraaf’s analysis please watch the video above.
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Trader disclosure: On Mar. 16th, 2008, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Macke Owns (GE), (GS), (MS), (SDS), (MOS); Macke Is Short (BRK.b); Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Terranova Owns (KCE), (JPM), (X), (POT), (WYNN), (XBI), (HESS), (INTC), (BRCM), (DELL), (JOYG), (FXC), (EOG); Terranova Owns (IBM) & (IBM) Calls; Terranova Owns (DIS) & (DIS) Calls; Terranova Owns (COP) Calls; Terranova Owns (AMGN) & (AMGN) Puts; Terranova Owns MACI Oil Futures; Karabell Owns (BHP), (CSCO), (FCX), (FXI), (GOOG), (GLD), (GE), (JPM)
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