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Tuesday, October 22, 2013

To Infinity And Beyond

A decent gain, plenty of volume, and a nearly straight up move since the budget debacle scare earlier this month: it seems we can;t get much more bullish than this. October's NFP numbers came out,and they sucked, which sen the market flying on what I would call the "Yellen effect". With numbers as bad as we are gettting, he market apparently sees no chance of incoming Fed chair Janet Yellen of tapering the stimulus; if anything, the market may be expecting even more. Despite all that, the market is getting a little overdone, and is likely to start pulling in again, possibly withing the next week or so, at which point we can probably expect another "crisis".

Here is today's bonus chart, since i didn't get to post the Russell 2000 last night. this is a little less bullish: we are starting to see a trend in under performance, and that is a clue that the market is running low on steam. The bullish scenario is a pullback to R1 before another move up: the bearish scenario is a blow off top followed by a collapse. Right now the first looks more likely.

I was looking for crude oil to find support at 100: it did not, broke the 200dema, and went into free fall, breaking another pivot point. This now has a down side target for this month at S2, and at this rate (which it might sustain), will hit it easily. However, with the high volume we are seeing, this could be where the also traders are setting their buy programs, and we could see a reversal.

Gold sure has a good day today, and is poised for an important breakout attempt. If it does, I would be looking at it, even though I don't normally trade gold, as the medium term up trend, while on life support, is still intact and I think this has an excellent chance of retesting the August high.

The yield on the 10 year, after testing resistance and failing, is now in a rapid move down to test S1.  This may be another manifestation of the Yellen effect, or it could be the bond market sees something the stock market doesn't.

Every time the dollar index seems to find some traction, it suffers another big drop which takes it to a new low. UUP was down big today, so this probably was as well. If so, it should be at another new low. Good for stocks, bad for people that need to buy stuff, like food. Maybe Yellen can convince the public to to quit eating and put all that money into AAPL.

I will have the new highs update shortly.

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