Not a heck of a lot happened out there today. Of course, that's all relative. I vaguely remember through bleary eyes reading about yet another $200 billion bailout, but it's all becoming just noise at this point. People seem to think the Fairy Governmentmother can solve all our woes. It can't, but people – – as they said on X-Files – – want to believe. It's going to be a drag waiting for the proverbial second shoe to drop, but when it does, we're going to party like it's late 1999.
Folks ask me what I like to read. I've mentioned a number of web sites. I also subscribe to Elliott Wave International's short-term update (STU). My experience has shown me Robert Prechter is amazing, but he tends to be years too early. The STU, on the other hand, has been really timely and helpful for me in my own trading. You can go to ElliottWave.com and give it a shot.
I've been looking across the asset board — not just equities — to consider how high things might go before we're able to Bear Party again. It's uncanny how similar the patterns are. No matter what I am looking at, whether it's a stock, or wheat, or gold, or an index, or bags of kitty litter, the prices all look positioned to retrace to either the 50% Fibonacci line or the 38.2% line. In some instances, there is also a nifty descending trendline which intersects with the retracement. Here are a few examples of how high I think bulls might manage to push things. First, the Dow 30; I think they've got a shot at reclaiming the quintuple digits, but just barely. It actually would be really cool to "conquer" 10,000 again, since that would provide a lot of relief and comfort to the bulls (be warned, my entire mindset for the coming weeks and months is going to be like a murderer lying-in-wait, so get used to it):
The Dow Transports might get to the low 4000s, but only after hacking through all the sludge from 3,400 to 3,900.
The Utilities are a bit closer to a "top"; I'd say somewhere a skosh north of 400. I'd like to re-enter my SDP at that point (grumble, grumble….)
Commodities are a tougher call. They have fallen a very, very long way. I've boldfaced two of the retracement lines below. The one around 520 is the shoe-in target. The one at about 710 is the most "optimistic" reach. In between, it would be a pretty easily sail. I've loaded up on DBA (again) just in case commodities shake off their blues.
The Russell – – at one time, my most adored trading instrument, but shunned badly since I completely missed out on the 650-to-375 debacle – – could possibly get up to around 650 again. It would take a tremendous tailwind at the bulls' backs to make this happen, but Oh My God, if it did……..it's redemption time!
The S&P, which I follow obsessively from Sunday at 3 p.m. PST until Friday at 1 p.m. PST, has its work cut out for it too. There's cruft from 860 all the way up to 1,000, then it's an easily sail to 1075. The trendline and retracement meet beautifully at this level, and although living through a 200+ point surge on the S&P would be a little painful (my longs notwithstanding…..) it would be oh-so-worth the wait.
Back to Thanksgiving prep. I am Mrs. Bear's indispensable sous chef. Fare thee well.
