Transcendental Market Fragments:
The Market:
My indicators and the seasons tell me to be bullish. A trader cannot fight facts and when the facts are pointing up, it's best not to argue with them. The main fact is that this time of year is the strongest seasonally bullish time of the year of all periods. Moreover, money flow has turned up (although not with any real substance - at least it's not going down now in most indices). When I see an absence of selling pressure and a seasonal up period, it's not smart to fight it.
Semiconductor Index:
Accumulation is lacking, but the trend is up.
Fundamentals:
Fundamentally, the situation in the economy is bad and getting worse. But, when there is a fiat money system which can print new money, and a public which still believes in that system (a necessary condition), it's possible to pump the economy up. That old tire will continue to inflate until it's worn out and blows.
The point here is that the overall downtrend is still there, but technicals and money flow have created a temporary detour in the market.
S&P Midcap 400:
Once wave e completes (688 ?), the next move would be a thrust rally that exhausts the uptrend. And, with an apex at Christmas, a Santa Claus Rally is looking likely this year.
EUR/USD:
The Euro Currency confirmed that it had formed a top by breaking below its rising support line. This has helped push the Dollar Index up and the stock market down. At this point, the Euro is very oversold and has traveled a distance below the support line approximately equal to its best travel above the line. This often is a reversal price area. A push back up to retest the broken support line is pretty normal. If the Euro bounces back up to test that line, it would support that thrust rally in stocks.
I'm expecting a nice pullback in EUO, so there is a choice of either trading around it (as I do) or adding to long positions on price weakness in order to scale in for the larger trend to the downside in the Euro.
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