Won’t it be ironic when we see the Dow print 11,000. We got within 237 points from there today, climbing the wall of worry Bad news? Plenty of it, Dollar can’t get through the wall at 78 and looks like it wants to go down and re-test 74. China begins tightening the regs on their banks, earnings worries, mid-term election worries, worries about a populist President with a huge tax and spend agenda, all things which are fueling the market climbing the wall of worry.
What happens when we print 11,000 this month, and we most certainly will? To come within 237 points is just too close to not have the market go up there and get that print. Will that be the top? Will that force the hands of everyone who sat on their hands from our March 09 low at 6446. Or will it be 11,440 which by that time will have been a 5,000 point rally in the market, all the while while we listened to all the reasons why it shouldn’t, or wouldn’t or couldn’t rally any further. THAT is the exact sentiment and market emotion we need to have this rally. I don’t believe we’ve had the capitulation jump back in yet. Such an influx of capital could produce quite a spike higher. At THAT point, most likely when Time magazine puts a cover out with the Headline “Obama’s 5000 point Rally” that is when will pretty much be done rallying. Then, and only then, go out and buy some puts. That will be the trade of 2010. 11,000 in the Dow will correspond with 1200 in the cash S&P… Round numbers, big resistance, psychologically important levels which will attract fresh bets. My opinion, is it will be the spark that brings the same people who puked at 7000 in the Dow, get bulled up and get long again, 12 months and 4500 points later.
Good Trading
