Wednesday 21 October 2009
Every single one of our S & P articles have been warnings, either for a correction
or a possible change in trend. We have colored the tone and character of the
rally as stemming from the Fed-slash-POMO inducement from massive amounts
of money propping up the market. The technical signs from us have been laid
out in analytical reasoning, yet none have panned out.
It becomes somewhat tenuous to keep advocating from the non-long side of
the market with nothing to show for the many messages delivered. Except for
a few lunch money trades, there has been no reason to recommend being short,
absent supply coming into the market, and THAT has been the key. [At least we
can argue not being on the wrong side of the market since July…but a no-show
on the right side.]
[It happens.]
No supply, zip, nada, nil. Demand has not been great, but in a defined up
trend, demand has already been proven, and the onus of changing price
direction falls on the supply faction, and they are nowhere to be found. The
level of demand cannot justify the unabated strength of this market rally since
March, and for this analyst who relies on volume as an important indicator, the
“never-ending rally” has a lot of hot air in it. [Hard to buy perceived “hot air.”]
The tape! The tape! Finally, it is all about the tape, and it continues to point
up, and as the well-to-heed adage goes, “Never fight the tape.” We have been
struggling with it all the way up since July. Is this then a capitulation? A giving
up?
Absolutely not!.
Seems we may need to be wearing a sandwich sign with “The End Is Near” on
it. This is rather just a note of backing off from commenting on this specific
market until the AWOL supply makes its presence known. The market is close
to declining here, but crying “Bear!” [which we are not] with no results potentially
erodes credibility.
When supply comes in, we will return to this market. [Hopefully, this week?]
Price could go to the 1115 area, even higher. [Next month?]
Cheers!
