December Dow Futures have now rallied 533 point in three days. From last Friday’s low at 14,692 up to today’s high at 15,222. At this point, I’ve been stopped out of all short specs with buy stops.
Dec Dow looks bound and determined to run up to the 15,500 level we failed at before. This seems like more of an emotional trade than any thing. I also believe there are enough “what if’s ” on the horizon to look for trades to catch the correction.
Of course, we are going to be heading into October in another 2 weeks. That historically has been a dicey month for stock indexes. October is the start of the 4th quarter. Money flow could be impressive then, especially if the Dow continues to rally and a lot of folks feel as if they’ve missed the boat.
My bias remains negative on this rally. However It makes no sense to fight the trend looking for a correction if the money flow is strongly supporting a continued rally.
I am neutral stocks for the next 3 to 5 weeks until I see something to really give me interest. For now, the stock indexes are bulled up, rightly or wrongly, Either get on board or get out of the way.
I am not convinced to get on board. For now I am going to step away and wait for a better opportunity to catch a counter trend move.
As for the grains, tomorrow we have the USDA at 11AM.
while no one expects real fireworks, we may be set up for some on the 17th when the FSA adjusts planted acres once again. That is a report that could give us some fireworks.
For now, I am still holding on to the Oct. 1300 puts.
Dr. Fibonacci, you failed us here today. 15086 was the 50% retracement and today we blew past 15,190 which was the 62%. This is why we use stops. When the retracements don’t work, you can’t get stubborn and then add to the losers. If these retracements worked all the time, there wouldn’t be any need for price discovery or open markets. This Dec contract looks bound and determined to challenge 15,500 yet again.
