We couldn’t take out the April high at 10218. We got to 11,195 Monday. I think that 10,710 is a reasonable downside target, after a one month, 1,300 point rally. The 1,300 point rally doesn’t get the attention of the mass media.
However, going into Election Tuesday, if we start with a tasty correction, there will be plenty of crying going on for the talking heads. I really like 10,700 level because it corresponds with the August highs from this summer. Those old resistance levels become good support, albeit sometimes temporarily, on the way back down. If 10,700 does not hold, look for 10555 and then 10,400.
A break to any of those supports would not be the end of the world. Quite simply, markets don’t just go straight up or straight down. Remember that 10,400 is the 1/2 point of the great melt down. Watch for that 10,400 level as a canary in a coal mine. Above it, and we’re cautiously bullish, below it, and you have to think about more downside slide.
Shift to Grains, for now, I am still bullish, grains are poised to extend their rallies into the end of the month of Friday. Cotton, however, seems to have finally hit the wall.
Good Trading
in october 2007 i publicly made a comment on the stock market and interest rate rigging in that if the powers that be wanted to keep this rally going then they would have to drop the basic 6 % bankers rate effective immediately, for market tops usually occur at the 6 percent fed rate. then i concluding by saying if they wanted to trash the economy then they would keep the rate high for a period of time. well the market free fell in november 2007 and they were very slow to ease the interest rate.
then in 2008 i think we are all amazed at how some banks went under, and yet some where saved by the private bank f’ed reserve. many thought that an Obama gov would save the world and we see that the opposite has occurred, though i am not for either dem or rep parties for they are all corrupt. this rally will either be a 1982 beginning or it will be a election fake out for now all the profits are about priced in. thats they way i see it and the market looks like its topping but like anyone who has been in this for over 10 years – we all know the market can surprise.
I think if we get a powerful settlement above 10,200, the upsdide run is back on. I too, could care less who is in office, markets discount every thing. I think it’s interesting that the market rallied 1300 points from its Summer freak out lows. CNBC was squealing over the July 4th weekend about the end of the world. As soon as it looked like the Dems would lose control in the house, the market started to rally. Market likes grid lock. Market does not like visionary changes, be they left wing, or right wing…Market is happiest when politics is in between the 40 yard lines. Not in the red zone..
Thanks for the comment. Have a great weekend.
CER