Very Encouraging for the Bears

This market's inability to get above 1072, and the break just now of 1040 bodes well for an extended drop. Rallies will now be sold.

Not Much of a GDP Bounce

If we're not able to get above 1060 before breaking yest's lows, 1040ish, Bears will have a drool-worthy drop.
A break above 1060, and then 1072 would prime us for a trading range.

The SPX Finds No Bounce, And GS Breaks the 50ma

There is a surprising lack of support at 1055-1060, although as of this writing the SPX seems to have at least paused a little below that range.
If we do see the bounce, recent action leads me to believe it won't break 1075 before hitting new lows.

This, along with GS (which to me has been THE bellweather for this rally) breaking it's 50MA, gives me a few hopeful signs. Another close (assuming today closes below) would really help my theory that this is THE break of the bull trend.

The CONfidence Game Might Be Over

Get it??
The 10am numbers this morning were another surprising sign of stress in a key leg holding this market up.

Encouraging, Though We've Heard This Song Before

The market's ability to break recent support and generally act odd is encouraging to Bears though this is very reminiscent of a couple of such episodes during the rally from March.

Each pullback does become more relevant, and this one, yet again, could be the one.

We'll be watching to see how the market acts at the mean reversion of a very steep uptrend, at 1055. I'd expect a bounce from there, and if that does not get above 1075 before going below 1055 again....

Well, no use getting that excited yet!

Boredom is Endemic

There's not much to say about this market, mostly because there's not much in the way of change in trajectory. Amazing to watch the entire financial blogosphere trickle to maintenance posts (like this one).

What's left to say?? There's no overhead resistance to 1220 on the SPX and the only target in the short term is the mean reversion within the sharp uptrend, to 1055, ONLY if 1075 is broken! Otherwise its on and upwards.

Bor-ring!

SPX 1086 is key today

If we can close below that, that'll be the first break of a more-than-1-day low in about 3 wks....

So, Jim Rogers Said At Yesterday's Conference.....

Yup, good guess. Buy oil, commodities and China.

Of course Mr Rogers, with his very long term investment horizon is not going to be a shocking talk, but some things really stood out about his presentation at the ETF Securities conference in NYC.

One was the recommendation to a slick MBA type, to move to Iowa and start the first Lamborghini dealer. They're all going to move there from downtown Manhattan he said since that's where the money will be made.

The other was that he's been reading the NY press the last few days while in town and feels they're overly pessimistic, the world's economy is much healthier than they're making it sound.

He also mentioned that he would short the US Dollar long term if it rises short term, and bonds are the next big bubble to burst.

Questions to His Theories Regarding Commodities

Jim's theory that since the world is at its lowest food reserves in a long, long time means that agricultural commodities will rise for the long term, can be refuted by postulating that this low reserve level may be due to the world's comfort in its ability to quickly produce that food using modern technology or by imagining that the this technology will improve as needed.

His theories on oil reserve figures being imaginary and a clear trend towards oil reserves depletion also can be refuted by invoking possible technological progress on alternative energies.

In general, both theories assume 1 thing: that demand verses supply stays high for these commodities. When he reminded us of Econ 101's theory of supply and demand, perhaps we should also remember the theories of elastic demand - at some change in price people will consume less, and of the invisible hand - supply will improve as demand drives focused effort and improvement.

THE ECONOMY IS BETTER??

The second point he made worries me much more. I've been of the opinion that things are overvalued, and to hear someone who knows value and knows it globally suggest otherwise makes me wonder.

It certainly lends credence to Yag's assertion, echoed by some of the people I met over the last couple of conference days, that the downtrend doesn't get going in earnest till Q1 2010. The market just kind of drifts higher till then on a sea of liquidity.

Being a Bear is Easier

Right?
There's so much more capital that is long only by mandate; there are so many more eyes looking for big winners; the natural state of the mind is to look for growth and believe stories propounded by protagonists.

Almost by definition, any given market environment must have pockets of overvaluation borne through optimism and a lack of capital and eyes looking for incongruous storylines. So, being a bear must be easier, right?

This Should About Do It

I'm pretty sure the resistance overhead will make itself felt here at ~1050. Looking for signs that this is going to be a reversal day, as per Dr Brett's methodology. (http://traderfeed.blogspot.com/)

Confirmation of the bear trend would require today's morning strength to reverse (pre-10:30 would be best) and 1040 to be broken. If we trade above 1065, stick a fork in the bearish move and gird your loins.

Will This Trend Be As Trendy As The Last 6 Months ???!!

That in my mind is the big question. Yes, we have a overvalued market. Yes, we have the news turning in the face of talking head cheerleaders. Yes, we have the most anticipated market drop ever (kidding).

But do the bears never get a chance to reload, much like the bulls didn't in March? Could this bear move be like the bull and start that way, chop a bit and end very trendy?

Watching for clues, will keep you posted.


I'm expecting a bounce to ~1050, but this move could be more trendy!

They DO Ring a Bell at the Top!!!!

And his name rhymes with Tag!

No kidding, this guy has the most amazing track record of calling tops and bottoms. He is the ultimate contrary indicator (at least his personal investing, jury's still out on the professional side.) Literally one of the hardest working guys I know, very bright. Does tons of research and therefore has been bearish the entire way up citing all the best reasons to fade the rally. Till one day...

This is an email I got from him:
Chrystal ball say….



Investors getting more bullish. I think we are 2-4 months away from a “top” but not yet there.


Guess what day? Sept 23rd at 8am. SPX: 1071

Whoohoo! Admittedly, I'm jumping the gun as to whether he's right or not, but the mid term has been a pretty good trade :-) !