Poor Stock investors. They have been trounced around the dance floor like a 2 dollar whore during Fleet Week. From a low of 10,329 back on October 4th, Rally up 1,900 points up to 12,228 on October 27th just 17 trading days later… Followed by a 3-day 658 point sell off down to 11,570 on Nov 1st…Wait for it…. followed by a rally to yesterday’s high at 12,144 for a 577 point rally…. followed today with a drop from yesterday’s high at 12,144 down to 11,688, only 456 points in 24 hours…
Trading in these markets demands 1) small bet size, 2) wide stops and 3) extreme discipline.
Levels I like? Dec Dow Futures… 11,500 and then 11,276 followed by 11,052. Those are down side targets if we get really silly between now an Friday’s close. I think the band between 11,276 and 11,052 represent an area to 1) cover shorts and 2) build a small long position.
Its a purely technical area of support. I have no idea what’s going to happen in Italy, Greece, Portugal, Ireland and Spain. Not to mention Germany and France.
How about the situation in the Mid east w/ Iran touting its nuclear capability. What happens if that area goes bananas? That would have to be negative for stocks…Or does the whole world retreat to the one recognized safe haven for money. The USA. Our carrier groups are the one thing that separates us from the rest of the world. No one else has our fire power. If the wheels come off the world economy, it has to count for something to still have the most powerful war machinery in the world with the ability to project that force anywhere in the world.
The dollar could easily rally back up to the 80 level if there is a flight to safety and away from the Euro.
Behind all of this geopolitical activity, corn wheat and beans may just end up being an investment vehicle. The fundamentals of supply and demand may go out the window if the world wide economy keeps rocking and rolling.
Make sure you have stops on for all your positions.
That is all.
CER