Fan fare, trumpets and three cheers emanated across the assorted TV Crews as the Dow printed 12,000. S&P Cash couldn’t get the 1300 print, however, running out of steam at 1299.74.
I think the next 2 months will be tell tale for these indexes. If all the money that is sitting on the sidelines gets bulled up, the ensuing rally could be sweet revenge for the buy and hold perma bulls.
I will re-iterate what I have been writing here for 6 months, There will be a cartoon, in a national media paper or magazine, with Obama riding the bull back from the March 2009 low at 6469. A very nice spike down v-bottom formation on the longer term monthly charts. FYI, we have now retraced over 62% of the “SELL OFF” Can it be long before people start talking about Dow 14,200?? The old record high from October 2007…???? We’ve rallied 5,551 points from low to today’s high print at 12020… What’s another 2,200?? I can’t believe this won’t be a rally to sell. The next upside target is 13,136, the May 2008 high.
I will go on record saying that while I was friendly over the past year for stocks, now I believe we will trade up to that 1300 level and then move sideways through a 1,000 or 2,000 point trading range. Its election season again. That sentence is rife with uncertainty. However, Obama has made a mid-course correction from the left towards the middle. The markets like the middle from its politicians. They don’t favor either extreme.
That being said, we have major problems left to over come. The market, if its to be believed as a forward looking instrument, is telling you that you can stop whistling through the grave yard.
Happy Days may not be here again, but I think the country is taking a collective breath. How long will that last? I have no idea. And neither does anyone else.
I will say that I believe the commodities markets will be the next bubble. I lived through and traded the Dot Com bubble, I saw the Real Estate Bubble. Investment community has caught on to the concept of food inflation. Drought in Russia, food riots in Tunisia, Egypt on the edge due to food prices. China quietly buying up every soybean it could for the past year… All point towards the building of a new bubble.
When they offer a mutual fund investing in commodities on cable TV, or if you see shows about trading as a path to riches, then it will be time to head for the exits…
Have you noticed how the late night TV hucksters are no longer talking about real estate money machines?
The warning sign for commodities will be when you flick on the TV at 3 AM and there is some retired “trader” selling you the easy way to wealth.
That is all
CER