Would you let your mother buy this stock?

090714gsWhen the history of the great Bush bear is written there will be a special chapter for Goldman.  Goldman would be quietly interred next to Lehman and Bear if Secretary Paulson had not poured government money into AIQ which was just a funnel for billions to Goldman.  Somewhere the ghostlike voice of Teddy Roosevelt is murmuring “malefactors of great wealth…”.  Well regardless of Goldman’s role in the global meltdown it has with the Treasury’s help clawed back part way to its heights.

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The essence of successful investing lies in recognizing dangers and opportunities and being able to tell the difference between them.  Goldman’s upwave from March has probably crested.  At the least it is nose up against a year long trendline.  The up trendline from March is too steep to persist.  A downwave is due.  At the least long investors should have a well chosen stop and we wouldn’t be buying any.  Repeating some of the rules of trends, never buy a downtrend, never sell an uptrend and be very careful about buying into old trends.

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The horizontal line under this formation is 10 years long.  Break it with a filter and run for the hills.  This line and the downtrend line from 2008 are fighting each other right now, but the odds are with the downtrend line even though it appears decisively penetrated.

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