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Earlier today, Evil Speculator posted a Gobi Desert article, highlighting the volume vacuum overhead.
I took a quick peek at SPX relative to the ichimoku cloud. With the run-up from the last few days, we are now touching/crossing the underside of the cloud (1192-ish).
There's been quite a bit of talk on the blogs about the possibility that this bear market might be finished now. Hard to say for sure but personally I think that's unlikely. Why is that? Well the analogs being touted around are mainly from the last secular bull market 1982-2000, which was the largest secular bull run in history and so isn't an ideal guide. Times have changed now. Corporate profits have been strong for sure, but the economy itself is weak. To illustrate just how bad things are I'd like to show a chart from Money Game's Chart of the Day, which shows the percentage job losses after recessions since WW2. It makes sobering viewing. Click on the chart for see the full write-up:
In our last post Germany Dax Update on 6 September we were liquidating our short Dax as it approached 5000 and turned long from 5000:
Friend-of-Slope and fellow blogger Serge send me a chart this morning which is, as so many of his creations are, a thing of beauty. Here it is:
What he's laid out here is not only gorgeous from a charting perspective, but it lines up beautifully with my own price projections and the events that are swirling in the world around us. Thanks, Serge; I'm prepared to become boldly bullish sometime this month!
Well, it's early Sunday morning, my entire family is still asleep, and I'm more interested in making a fruit crisp for breakfast than I am going through charts right now (after all, something has to be done with all these pears). So I'm going to do a quick, lazy post and recap where I think things are heading for the next year and a half……..going backwards:
So, in sum – – – a fall to about 1030, a rise to as high as 1300, and then a fall into oblivion. Of course, real-time conditions may compel me to utterly change my mind about all this, but my belief in the above scenario is fairly deeply-rooted. If this plays out roughly as I've described, I think early 2013 will provide bargains that haven't been seen since the early 1980s.
For now, I can say that I'm positioned entirely short with a 60% commitment, and I have a mountain of interesting short candidates waiting in the wings. If we are breaking beneath the range established over the past six weeks, the bears are going to do great, and I want to be fully on board for that. The key, though, is to break that range.
It is entirely possible I could be in over 100 positions and fully committed early this week, but I'm going to let the direction of the Euro and ES guide me.
