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11.17.09
New Market Highs

All three major indices set new yearly highs on Monday, which the financial media regards as particularly bullish. One reason is that the S&P 500 has been lagging the pack. With ‘confirmation’ from the S&P, some market technicians are breathing a sigh of relief. Hummmm.

11.12.09
A 400 point decline would be normal

On Wednesday the Dow tagged 10,341 intraday, which satisfies the primary target level (10,300) that we predicted many months ago. This is an attractive place to take profits. Although an immediate overshoot to Dow 10,500 is possible, a near term correction is more likely. Thus, we are tightening stops.

11.10.09
Full Speed Ahead

Yesterday we predicted that the Dow would move very quickly through the 10,000-10,300 zone and most likely overshoot to the upside. So far, so good. Monday’s 200-point move took the Dow up 2% to 10226, its highest finish of the year and its second 200-point up day in the last three trading days. This leaves the index just 28% below its all time high.

10.21.09
Wednesday

The rally to the top of the gap zone is underway. We think it will overshoot to the weekly 200-ema around Dow 10,463, the red line in this chart.

09.23.09
170-470 Points to Go

Thirty Dow points here, fifty Dow points there and pretty soon you have real progress.

All four major indices made new highs for the year yesterday, but without fanfare. Based on comments we are hearing from brokers, you could call this the Reluctant Rally. Despite skepticism about the economic underpinnings, investors don’t want to miss out on a rising market, so selling pressure remains mild. When the music stops, we expect a sharp down day or two, but the first selling spree will probably be bought after a few days of purging.