Charts Predict: New President, Big Rally
By: CNBC.com | 22 Dec 2008 | 05:21 AM ET
The Dow Jones Industrial Average and S&P 500 will rebound in the first quarter
of next year as incoming President Barack Obama is likely to boost investor
sentiment, Robin Griffiths, technical strategist at Cazenove Capital, told CNBC
“In the stock market the beginning quarter of the year will have relatively
good news. We will see the S&P and the Dow rebound from the October / November
lows and have a significant rally,” Griffiths said.
The inauguration of Obama as president on Jan. 20 will help to lift
expectations for stock performance, he said.
“In the American market you are coming up to a new president with a mandate to
change anything, with an entirely new team and measures coming forward, which
are broadly on the right lines,” Griffiths said.
“It would be astonishing if they had no effect,” he added.
The first-quarter rally will only be a bear market surge unless the indexes can
rally about 30 percent higher than current levels, according to Griffiths.
Gains in that region would send clear technical signals that the bear market
had been broken, he said.
Griffiths also says “cash is trash” and dollar investors should wait before
plunging into gold. Watch the video above to find out why
