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Pastimes : The Justa and Lars Honors Bob Brinker Investment Club Thread -- Ignore unavailable to you. Want to Upgrade?

To: Boca_PETE who wrote (6754)	11/10/2011 7:29:04 AM
From: Justa Werkenstiff	1 Recommendation Read Replies (2) \| Respond to of 10065

Hi Pete: Here is what the bull case needs market-wise going forward: Overall reduced market volatility at this stage. Sure, you can have a whoosh off the bottom like we did during October. But right now what the market needs is to climb a wall a wall of worry (European contagion) with small range candle bodies, few pullbacks and a march toward the yearly highs. We need a higher high over SPX 1292.66. So far we had a lower high as we reached 1227.75 and we reversed when we became somewhat overbought on a daily basis. Overbought readings are persistent during bull moves as the market climbs a wall of worry. A loss of 47 SPX points from somewhat overbought daily readings in November does not read like a bull. Small pullbacks from extremely over bought readings are more consistent with a bull market. I don't care if the Italian bond yield "caused" it. If not that, it would have been something else. Greeks forgot how to form a government and Spain is next in line after the Italians put on their show. If you are a bull, you have to believe they will muddle through this contagion and more won't be shaken from the trees going forward. For the month of November on a closing basis, I would like to see a closing high at 1292.66 or above to give me pause to consider the bull case. Not only is that the high for this move but there is a ton of resistance in that area built over a number of months in 2011. A move above that to close the month of December would work too under certain circumstances too. This is a historically bullish seasonal time for stocks. If the market can't put up some good numbers here, one has to believe there is an underlying erosion of the fundamentals longer term consistent with a recession. Justa