The bounce back in equities to those numbers has given me pause. Perhaps we will return to being cautiously bullish. I think its wise to step back and take a neutral position at these levels.
I am naturally inclined to sell these levels.
However, the few remaining shorts I have on Stock indexes were profitable, but were exited from with buy stops during this recent rally back.
I am inclined to think we may be entering a phase of sideways trading. Quite frankly I don’t have an opinion as to how wide the range will be. On the geopolitical front, a lot is in flux. If the Muslim brother hood takes over with Democratic elections in Egypt, can a war with Israel be far behind? I am just cynical about that part of the world.
In essence, you have a family feud between the Arabs and Jews which extends back millenia. How can renewed confrontation between Egypt and Israel be good.
Answer that question, and you’d be winning the Nobel Prize.
So, bottom line, sell new highs, look for profits on panic selling, but also look to re-own and get long on corrections. Markets do nothing if not climb the wall of worry. Right now there are plenty of worries to fuel the continued rally of the wall of worry.
For the grains, Once again, we challenge 666 in CH. Ironic? Yes, I think, However, it was the first day of the month, we’ve rallied 70 cents in the last month, the chart looks vertical, and i am just suspect. Look at a weekly chart of CH, its almost vertical from the July lows at 357. A 3 dollar rally with out a 1.50 correction seems unusual to me. 30 cents away from that nice 7.00 target, though, so any thing could happen. But, I am leaning towards selling these levels, again, with a buy stop above. A very tight buy stop.
WH is in no man’s land between 825 and 850. We need to move through one of those levels definitely to give me a better feel. Again, its time to just step back.
SH looks the best out of all 3 of the grains. A nice, 45% rally, looks like the 1970’s all over again. Its just a beautiful 45% bull trend line.. dips are to be bought. I want to buy SH on a dip back to 13.90 or even better, 1260. That would be a return to 1 of 2 underlying trend lines on the daily chart. Beans, in a word, look strong. Of course, that’s exactly when you get an out layer, whacking the market, so be ware. However, Just as CH looks like it wants to go to 7.00, SH wants to go to 15.00 and we could be there by Friday.
That is all. Good Trading. Get ready for the 2 feet of snow on the way to Chicago.
Be Safe.
CER
