Don't Buy Risk in This Bear-Market Rally: Chartist

Is Thursday's stock tumble just a bank-oriented hiccup in a new bull market — or par for the course in a bear-market rally?

Robin Griffiths of Cazenove Capital said the charts indicate a pessimistic view.

He concedes that the FTSE today hit its 200-day moving average.

But he said that one must consider the make-up of "what caused the rally" in the first place:

"The lower the quality stock, the worse its balance sheet and profits — they led the rally. That isn't good if you're going to look for a bull market."

He notes that the big global miners "have done well," driven in part by now-slowing growth in "China, India, Brazil." Pointing to the explosive gains by BHP Biliton, Griffiths said, "Thank you very much for doubling — but I don't think I'll buy it on the long-term view."

Griffiths concluded: "I would take risk off the table at this point."

Major Miners Now:


Freeport-McMoRan Copper & Gold

Southern Copper

Cliffs Natural Resources



Disclosure information was not available for Griffiths or his company.