"Now the market has gotten itself into an interesting position, because it has rallied back up to the top of the sideways range. It pulled back off of it, but has succeeded in holding up and is now near the long-term resistance of the top of the range - the 1220-1230 area of the S&P500.
If the market can break through that range and rally up to the 1250 area then it will be in a position to make another big leg up into the 1300-1400 area. In other words if it can breakout here then it can put on a big rally that will likely last for several months and probably lead to another big manic top."
"The market is at a key pivot point. The S&P500 is right below the 1230 area so it is at a point where it will either top immediately and turn down on everyone or else pause for a few days and then breakout to begin another big run that will last the rest of this year and probably into February or March."
"A capacity utilization reading below 75% is considered to be deflationary and such readings are typically seen at the depths of recessions. A straight-forward reading of the Kress long-term cycle series suggests that by 2014 we will see a capacity utilization reading below that of last year's multi-decade low reading.
In the interim period between now and late 2011 when the last of the important yearly Kress cycles is scheduled to peak (the 6-year cycle), there is a good chance that the Fed's re-inflation efforts will succeed in temporarily staving off the effects of deflation in the U.S. The year ahead will present perhaps the last opportunity of the post World War II expansionary era for individuals and corporations to shore up their balance sheets, buy gold on any dips or corrections, and prepare for the hard deflationary winter ahead in 2012-2014."
"As we all know, when the market is trying to top and roll over it tends to be more of a process than a couple day event. It's this lengthy topping process which has a lot of choppy price action which sucks traders into a position much to early or shakes you out of the position before the market does what you anticipated.
On the flip side, bottoming is more of an event because it tends to happen after a strong wave of panic selling. Fear is the most powerful force in the market (other than the Fed/Manipulators.. but that's another topic). That being said, when you know what to look for in bottoms you can generally see the market starting to bottom and prepare for it.
The charts below of the US Dollar Index and the SPY clearly show the inverse relationship they have. Right now it seems everything is directly connected with the dollar… it has been like that for most if the year… I will note that its not normally this clear. Anyways, the dollar is currently trading at resistance which means there is a good chance it will turn back down. So if the dollar drops, then it should boost the SPY (equities market) and put in a bottom for stocks."
"As we head into the final two trading weeks of the year, the U.S. Dollar Index has completed two of the three steps typically associated with a change in trend: (1) the black trendline was broken, and (2) a higher low has been made. The third step would be to make a higher high via a daily close above 81.19.
In the chart of the dollar above, the Rate of Change indicator (ROC at bottom) has made a few higher lows and higher highs, which leans toward the bullish camp. If we fail to see a close above $81.19, the door would remain open for the bears. One possible bearish development is the fact that ROC has not cleared the zero line again."
发表于 2010-12-8 08:35
| 
