Transcendental Market Truths:
The Market:
The market's decline last week is setting up a final trading low for a rally into the May 20 top, to be followed by a decline into June, then another rally into a late August (or early September) top, followed by a plunge into December. The dollar remains strong and is in accumulate on dips mode.
Oil:
With the massive oil spill in the Gulf of Mexico growing larger and larger every day and no relief well likely to be in place for months, I'm looking at the possibility that the politicians "owned" via Big Oil will break loose of their bribes and actually stand up and allow alternative energy to be developed. For years, oil companies have paid regular bribes to politicians to block real alternatives, while paying lip service to alternatives which have no hope of actually displacing oil. But, the public may finally wake up and throw out these slaves once they realize what is happening. There are multiple alternatives which, when developed, will obsolete the use of fossil fuels. Once the market realizes that, prices for oil will be decimated.
Near term, though, a runup to the 50% retracement level (88.235) just under 90 is very possible.
Dollar Index:
The Dollar Index continues to soar as the long term trend remains up until at least 2013. European ministers will be jawboning to hold the Euro from a rout and that should provide something of a rest period for the dollar near term.
EUR/USD:
What is clear is that the euro is in a rout. ECB bankers and ministers do not want a rout, but they do want the euro lower. Look for some jawboning, including outright lies about the debt situation, to attract bottom feeders to buy the euro in the near term. That does not change the long term downtrend at all, it just slows it down.
Nasdaq-100:
A rebound into May 20 should present a selling opportunity.
SPX:
SPX could run up to 1256, the measured move objective coming off the last low. However, a double top near 1216 appears to be more likely. In terms of timing, the 21st of May is a likely high.
Russell 2000:
Long term holders of small stocks in the RUT have been selling into rallies. This whole "bull market" has simply been a price levitation to allow them to disgorge shares to the masses, who will be left holding the bag as the next leg of the depression decimates their holdings. A rally into the 21st would allow the last of the off-loading of shares to the greater fools. |
