The market has spoken. It always does. Triple top resistance, once violated, as we just did yesterday, is a powerful statement. That resistance should become support as we head into the future. While I was looking for a fade, to sell new highs, if you read my entry, I wrote about the need to keep buy stops tight. An opinion is only good if it gets you profits.
Upside targets in the Dow Cash: 11,790, 11,867, 11,925, and of course, 12,000.
Upside targets in S&P cash: 1255, 1274, 1303, 1313.
At some point, we will have a good 25% retracement, for now, between QE2 and in the wake of the election, I think there is room to run higher in the stock indexes. I will continue to watch “popular sentiment”. If Newsweek runs another cover about “Happy days are here again”, that’s when I will load up on puts.
Gold is poised to run up to 1500. Yesterday’s all-time high at 1394.40 got us within 105.60 of that psychological number. It’s only a matter of time.
When you add 600 Billion into the mix, the market anticipates inflation. With this morning’s unemployment showing signs of recovery,with a gain of 151k non-farm payrolls, getting us to to a level of 9.6, has to be a welcome development what ever your political bent. People need to work. If it takes inflation to get us back on track, I would argue that’s a better alternative to 1930’s type deflation. But that’s my opinion. Eventually, the piper will have to be paid. Probably in the form of super high interest rates, A la Volker in 1980-1982. The inflation will have to be wrung out. For now, considering where we were as a nation and a world economy, inflation is the price it seems we will pay for a recovery.
