SPY DAILY5% more to go.

On the Russell (774) and the NYSE (7,866) anyway. We already nailed our Must Hold targets on the Dow (11,590), S&P (1,235) and the Nasdaq (2,603) and we’re now looking to take those +5% lines on the majors and that’s the first time I’ve had occasion to use “+” and “5%” in the same sentence since July!

1,300 is our next goal on the S&P (1,297 to be exact) and it’s just 4% to go so we’ll be watching that 76 line on the Dollar for a breakdown that will give us the thrust we need to break the S&P out of the gravity well of the lower half of our trading range. Fortunately, for S&P fans, the Dollar initiated a “death cross” back on Oct 12th and is in the process of confirming a move down if they break below the 200 dma at 75.77 so let’s watch that line for some real bullish fun this week!

The Euro, on the other hand, formed a “life cross” on October 5th and just broke over the 50 dma at $1.388 and is heading up to test the 200 dma at $1.4065 and, as I said to Members earlier this morning, above that level will be a squeeze on the Euro Bears that will have them gnawing their legs off to get out of that trap.

Already we’re flashing the signals of a stimulus-driven rally. Oil is up $20 since October 1st, copper – which “proved” the recession just last week at $3 is now bullish at $3.45, up 15% in 2 sessions. Rice went limit-up yesterday, capping off 11% of gains in just two weeks. Rice is 1/3 of about 1Bn families’ budget on this planet – not 1/3 of their food budget – 1/3 of their family budget and it’s up 19% for the year now.

It was rising rice prices that kicked off the collapse of 2008 and, as nicely illustrated in this cartoon, it’s food prices in general that are most likely to bring about revolution. You can force people to work long hours with no pay, you can freeze them in the winter and broil them in the summer by raising the price of energy to the point where they can’t afford to heat or cool their homes,…
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