anyone else notice Richard Russell thinks we could have a sizeable rally here? An excerpt from today's post:
dowtheoryletters.com
Hans Blix stated yesterday, "The results to date have been consistent with Iraq's declarations."
So again, what does the Bush administration do now? They've been hung out to dry by the members of the UN. Does the Bush crew go it alone? Does the US split in a huge way with Europe, China and Russia? I don't know the answer to that one -- do you?
Meanwhile, time is running out for a war. The favorable weather will be gone in a matter of a few months. Attack Iraq and incur the wrath of the world? Or do you sit on your rear end and look like you've made all the wrong moves?
The stock market likes the idea of no war. How do I know? Easy, the Dow rallied 158 points on Friday. My PTI, which was sitting exactly on its October low of 5203 on Thursday, rallied 6 points off that low on Friday. Breadth wasn't that great, neither were volume indications. Nevertheless, the stock market has been oversold for weeks, and it could easily rally convincingly from here.
Based on my data and studies, this is no time to be short -- unless, of course, the Bush team ignores everything that happened in last week's UN session and just goes in and attacks Iraq (I don't think that's going to happen).
So let me make this brief and succinct. My guess is that this is a good time for the timid to be out of the market, and maybe it's even a better time (if you're a trader) to buy some DIAs, SPYs or QQQs. A decent, maybe even a strong, rally from here would be what I expect.
And since the war premium for gold could be reduced, it would not surprise me to see gold and oil go lower.
As for gold, remember, gold is something we hold for the very long term, or as long as the Federal Reserve is part of the US money creation process of the US.
As far as the market is concerned, if a real turn is here we should see additional proof of it in next week's action. I would want to see a few days of broadly rising prices on increasing volume. I would want to see large, across-the-board gains in the 30 Dow stocks along with good breadth. I would want to see the major averages very firm an hour or so near the close of each session. |
