judging from the way equity market is trading, the price action is still more characteristic of a short-term overbought consolidation rather than a beginning of a new down-leg. This, in fact, is pretty encouraging because after the massive back-to-back rally, a healthy consolidation would give the market the needed time to establish a strong footing. Additionally, the long-term trend remains bullish so it seems to us that this correction is a good opportunity for investors to get back into the market or to rebalance their portfolios.

Capital Essence’s CEM News - Market Outlook (the technical analysis of financial markets) for September 22, 2009: “…XLV had moved up to test the top of its trading range. This is a significant resistance with the confluence of the August high. Money Flow measure remains positive, signals accumulation. So it seems to us that this rally could take XLV to…” Subscribers, please login to read the rest.

while the medium-term technical outlook continues favor the bulls, prevailing market condition isn’t associated with a good risk/reward profile to accept near-term fluctuations. So we’d look to increase upside exposure on weaknesses rather than chasing breakouts.

儘管中期技術面依然利於多頭，但總體市場情況並不具備良好的風險/收益比，因此我們應該逢低買進而不要追高。

The near-term technical pictures for the major indices (Dow Jones industrial average, NASDAQ composite and S&P 500 index) are very similar. They’ve all rebounded nicely off support at the lower border of the six-week falling channels. This is a encouraging but let’s noticed that following recent advance, the market is at or nearly overbought in a short-term basis