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Tuesday, November 12, 2013

No Longer On Bullish Ground

Yesterday we had a holiday for an excuse, but I'm not sure what the excuse is today. Again we barely moves, and while volume was higher than yesterday, that is not saying much. We are still righ in between pivot points, with one or the other the likely targets for the next move, but we don;t know which way or when it comes. The market does appear to be weakening, but it could also be preparing for another breakout attempt. One thing we can say for near certainty; the first move will likely be in the wrong direction.


I expected a bounce in crude oil  when it hit the S1 pivot point; we got one, but it wasn't much of bounce, and now we have started another leg down. S1 is broken, so don't expect a bounce off it again. See yoou at S2 next Tuesday.


Oh, dear, gold just didn't get the job done. It was poised to move up after finding support at the P pivot point, and it looked like the up trend that started in July was intact. Something went wrong, and it collapsed. It is now at the S1 pivot, where it may or may not get a bounce, but bounce or no, the up trend is dead.


The yield on the 10 year Treasury was beginning to look like it was under control, but this week, control seems to have slipped away. This sure looks like it is going o go higher, at least in the short term, and that probably won't be good for stocks.


Also moving up in the short term is the Dollar index, and it is at a critical juncture: a breakout pas the 200dema could lead to no only panic buying, but panic short covering as well. A rapid rise in the dollar will lead to margin calls, and that will lead to some pretty ugly action in the stock market. That is too early to call right now; UUP barely moved today, so we are still safe, but we better start watching this pretty closely.

We aren't quite there, but I think we are in the early stages of a correction. I am lightening up on the long side, but it is too early to go heavily short; there are still lots of intervention possibilities, and tthe bearish side just hasn;t asserted itself yet. However, all indications I am looking at indicate we are, if not in outright bearish territory, at least no longer in bullish ground.

I will have the new highs update shortly.

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