AheadoftheNews Blog

2006-11-30T18:40:00.000-08:00

As of November 1st 2006, all posting will be at: AheadoftheNews.com

2006-11-10T17:48:00.000-08:00

2006-10-31T23:07:00.000-08:00

Semis are starting to feel some pressure. This chart of SMH shows the 50 day moving average battle, but also a diamond formation (lower lows/higher highs followed by higher lows/lower highs) which is normally bearish. Resistance is 34, 34.25 and 34.70. key support is 33.30. A close above 34.25 and more importantly 34.75 puts semis back in charge. This theory that we can sustain a prolonged rally without the semis, on the basis that business IT spending is in software, is somewhat dubious. It is irrelevant (was October relevant?) that we are going into November, in fact early November could be bearish. However, shorts should take note of the strong put support below us so the second half of November (going into option expiration) should be bullish. But for now, I would be patient if looking for a long entry. We could be in a short the rallies mode for a week or so. My advice is still to take this one on a day to day basis. Today's push into the close was welcome news for the bulls, but we have to see if there is some follow through now that we are done with the fund year-end shuffle.

2006-10-31T22:16:00.000-08:00

The big event tomorrow will be oil inventories at 10:30. Today, "surprising" support was found right at 76.4% 2005/2006 after a brief pull out of the descending wedge. Support is at 58.10/58.20 and 57.50. Resistance is 58.65, 59.50 and 60. Falling wedges are bullish formations, but they can narrow the range for some time, so trade it. But one cannot ignore the strong bounce off 57 with positive divergence and the bullish hammer close.

2006-10-31T11:52:00.000-08:00

It's an awful day to trade equities. Funds are doing their racket and direction is hard to come by. It's just amazing to see how hard they are working to prop things up for their little bonuses. The best trades were in oil and gold.

2006-10-31T11:32:00.000-08:00

That bid in oil gave the bears some ammo. Let's see what happens at the close.

2006-10-31T11:16:00.000-08:00

And there goes oil, now at 58.15, up more than 1 point off the lows when I made the post about the selling getting overdone.

2006-10-31T11:03:00.000-08:00

NQ 3mn chart with fibs.

2006-10-31T10:55:00.000-08:00

Support held up for NQ, but it's all very choppy and tied to every tick of QM. I doubt the highs will even come close to being revisited today. SOX has taken the lead, though and NQ broke out ever so slightly above trendline resistance.

2006-10-31T10:04:00.000-08:00

That didn't last. Steady series of bear flags the past hour. Watch NQ 1731 support.

2006-10-31T10:00:00.000-08:00

10 DMA support once again for NQ (1731). Semis are green.

2006-10-31T09:03:00.000-08:00

Qm hits 57.025. Getting a little overdone, especially since he weather forecast only runs up to the first two weeks of November. Seeing some bullish divergences at lows, 57.20 was an area of support for the November contract, let's see if they can find support on the December one. Otherwise, it's 56.50, but two days in a row of S2's would be unusual. Nevertheless, funds are offloading today before EOM. Inventories tomorrow are expected to be bearish for oil, you just have to figure out at what point is it priced in.

2006-10-31T08:32:00.000-08:00

Looks like COMP 2374 was the stall. This advance was done on weak internals. Just watch out for the pre-lunch bid. Oil keeps dropping, now testing the bottom of the descending wedge (more on that later).

2006-10-31T08:09:00.000-08:00

COMP at first half 2006 highs.

2006-10-31T07:50:00.000-08:00

Choppy, but TRINNQ was supportive of NQ, now testing 61.8% at 1743.50.

2006-10-31T07:27:00.000-08:00

NQ closes the gap at 1736.75. SMH drops 33.82 support, let's see if all this holds up. Watch QM and the 58 level.

2006-10-31T07:22:00.000-08:00

Keep an eye on SMH (semis) 33.82 level.

2006-10-31T07:19:00.000-08:00

NQ drops to 50% at 1739, doesn't quite close the gap. The weak internals to start with have gone negative. ES has a must hold level at 1380/1381.

2006-10-31T07:03:00.000-08:00

NQ leads the charge, but it remains of the light variety as ES shows little enthusiasm thanks to falling energy. Most of the SPX earnings growth the past year has been in that sector so it is no suprise. QM did not quite hit S1 and it seesm content to find support at a level the November contract briefly did.
Gold does a remarkable job of staying afloat given the QM drop but the dollar is struggling against the Euro and that is helping. The ex-trendline resistance from May, now support, was where gold found a strong footing.
Remember that this is the last day of the month and mutual fund year-end at that, so don't take too much at heart.

2006-10-31T01:58:00.000-08:00

Gold closes the gap and tests 50 DMA at 601.50. It's a must hold here.

2006-10-30T23:20:00.000-08:00

Last day of the month coming and NQ (NDX futures) just made a lower low and lower high on the daily. Add a bearish RSI divergence at highs last week and bulls should proceed with caution. As with ES, we could still see a test of the bottom of the channel. Some important data coming out this week, including jobs, and there could be some more distribution.

2006-10-30T23:00:00.000-08:00

The dollar is forming a bullish ascending triangle but with a bearish divergence on the higher lows. Not very clear, but if it can get back above 85.85 resistance, shorts should be careful. It's a tough call and momentum is hard to come by either way. This is not making life easy for gold traders who are now facing falling oil prices which they must balance with an uncertain currency outlook. Inflation is still a risk, but the Feds are in no hurry to act, at least for now. Bonds are probably the best cue at this point.

2006-10-30T18:08:00.000-08:00

Lots of air below if crude does not hold the lows and double bottom. 57.75 would be a given on a break of 58.125 and if that does not hold, 56.50 is next. Below that, a big gap from 2005 looms at 51.95/54.50. That's a long way from here and for now, let's focus on the day to day and watch for bullish divergences on any lower low followed by a bounce with volume. Resistance is 58.65, 59.25 and 59.50.

2006-10-30T15:56:00.000-08:00

December gold closed right at neckline support. Next level below is 50 day moving average at 602.20, gap close at 601.10 and 200 day exponential moving average at 601. Resistance above is 609, 613.50, 615 and 620/622. The strength today was surprising given the drop in crude, but once we cleared that May downward trendline resistance, the short covering intensified. Chalk it up to perceived continuing dollar weakness (more on that later). Watch 601/602 key support going forward.

2006-10-30T11:40:00.000-08:00

ES daily chart, still in that channel, but they are selling that 5 DMA at 1387.25. BIX (financials) keeps on finding 20 DMA support and is holding the fort a little today. RLX (retailers) doing a much better job and approaching those new highs once again. Still getting a bearish feel to all this and the bottom of the channel at 1368/1370 could very well be tested this week.

2006-10-30T11:08:00.000-08:00

That fat finger ES 1398.50 trade a week ago in the overnight session is coming to mind. A higher high pop this week at that level? It is weekly R1, after all. Trade it, don't love it definitely comes to mind, short or long. Right now, 1386.50 is still resistance. Not the same punch than NQ as XLE drops 1.2%. Frankly, I still regard SPX 1389 (see my posts last week) as brick wall for now, but we might not be done with elections low volume supportive jabs.

2006-10-30T10:59:00.000-08:00

The buy the dips bull machine is back, albeit a little chastened. Equity bulls are breathing a little easier and they can thank the weather forecast and lower oil. It was quite surprising not to see NQ hit S1 and 20 DMA around 1718, but this heavy bid at any lows is becoming routine. But bulls should be very careful as we are also seeing some end of month adjustments which tend to be artificially supportive and some hedgies could very well be waiting for the right entry to sell this bloated market.

2006-10-30T10:56:00.000-08:00

QM (crude futures) whacks a few stops below 58.65 support, now back at 58.70. ES hits 1386.50 resistance. Gold holds on to the neckline.

2006-10-30T10:54:00.000-08:00

Techs hit it the ground running on an NQ bid above pivot and 50%. ES should follow and tag 1386.

2006-10-30T10:46:00.000-08:00

December gold drops 609 support as oil loses 58.65, still bullish especially given the drop in energy. The mixed dollar is helping, but first and foremost, gold traders are a very savvy lot and they might be telling us something. Gap close is 601.10 on a drop, which is also ex trendline resistance from May and 200 day ema, so basically huge support. Neckline support from inverted H&S is around 605 and it could very well be all they give bears. Target on a 601/602 hold is 620. If crude manages a succesful bid from here (58.60), it could be back to the races.

2006-10-30T10:42:00.000-08:00

Equity bulls smell blood as QM drops 58.65 support. Lots of noise still, so be careful.

2006-10-30T09:26:00.000-08:00

NQ indeed getting slapped at 50% Friday/Monday, 1739. ER loses the 10 DMA battle for now. That one is turning out to be a real money maker shorting bounces.
QM (oil) is at a critical spot and you can see the conflicting forces at work. Everyone knows that a drop below 58.40/58.60 could kick in some very serious selling, probably down to 56.50, sp there is a lot at stake here.

2006-10-30T09:07:00.000-08:00

Warmer weather fears by oil bulls are exaggerated at this point. There is still some cold spots and the outlook is not so bleak as to drive QM below weekly S1. Northern plains are still going to be subject to some harsh conditions.

2006-10-30T08:56:00.000-08:00

Watch ER and its 10 dma at 770.50. It is lagging on a relative basis, even though it is green today. What I discussed Friday still stands if small caps can't get back in that wedge.

2006-10-30T08:52:00.000-08:00

As expected, oil finds support at 58.65 and equities stall their bid for now. NQ hits PP and 50%.

2006-10-30T08:17:00.000-08:00

NQ and ER find resistance at respective 10 day moving average, ES finds support there. Watch ES 1380.25 for any sign of further deterioration. Sop far, it has been overnight support.

2006-10-30T07:57:00.000-08:00

Oil keeps dropping. If 59 does not hold, next support is 58.65.

2006-10-30T07:43:00.000-08:00

The drop in oil is supporting equities from further damage at this point. That can change, but NQ did a lower low from Friday with a slight bullish divergence. ES is right at 10 DMA. Can go either way, watch oil.

2006-10-30T06:51:00.000-08:00

NQ going for a gap close at 1731.50. Keep in mind that there is risk to 1717 area, confluence 20 dma and S1.

2006-10-30T06:48:00.000-08:00

YG weekly R1 at 610.75.

2006-10-30T06:34:00.000-08:00

Gold got an extra kick, now up above the neckline. R1 at 607.90 is immediate resistance. Support is now firming up at 601/602.

2006-10-30T06:32:00.000-08:00

BALTIMORE (MarketWatch) -- Jeffrey Lacker, president of the Richmond Federal Reserve, said he continues to be more worried aobut the outlook for inflation than a possible economic slowdown.

2006-10-30T06:07:00.000-08:00

NQ and ER find resistance at respective 10 day moving averages, ES finds support there. Watch ES 1380.25 for any sign of further deterioration. So far, it has been overnight support.

2006-10-30T06:06:00.000-08:00

Some pressure on oil as it dips below 60, but finds support at 59.50, 61.8% recent rally. If oil bulls can somehow hold on to 59.85, they could stem the decline, otherwise we could test 58.65 this week. Resistance is 60.20.

2006-10-29T17:03:00.000-08:00

Gold is doing the breakout I thought it would, now trading above 50 DMA and trendline resistance in place since May. This is an important move and if the lows hold, a strong bullish bias is established. Support 600.90/602, resistance 605. Inverted head and shoulder gets confirmation on a close above the neckline now around 605/607 which would give a maximum projection to 650, although I think 620 will be strong resistance. Watch the 50 DMA as well at 602.15. The 600 level is a must hold now for bulls as it coincides with 200 day ema and ex-trendline resistance. But with lots of gold bears out there, the squeeze could be on.

2006-10-29T11:30:00.000-08:00

Always hard to predict what will happen in the coming week, but Friday's selling at the close was a first in seven days. A cursatory glance at the media shows lots of optimism and calls for "buying on a pullback", "this is great, an opportunity to get in" etc... That always spells trouble. Bulls want to see some fear and pessimism when we correct after a sharp rally. My guess is we head lower, probably test 1368/1370 level for ES. Maybe we get one higher high at 1398.50, before heading down. I would have a bearish bias now if they keep selling the close, so watch for early rallies that fail. Support is as easy as it gets: 10 day simple moving average accross the board. Mark it and trade it. Watch NQ for a heads up.

2006-10-28T08:29:00.000-07:00

The economy is slowing down, and possibly headed for a recession. Small caps get hurt quite a bit in that type of environment. One look at the Russell 2000 futures (ER or MR), and you can see the pressures building as it is the only index with a bearish ascending wedge about to breakdown. It also closed below its 10 DMA, again, the only one to do so. Friday's low was critical support, if we fall below those levels, we are out of the wedge and headed for the 755 level. Watch 768 support on Monday and 10 DMA at 770.80.

2006-10-27T12:36:00.000-07:00

Gold is about to breakout from that downward trendline in place since May. This could be a big deal for the metal. 602.50. A failure would not be pleasant, but it looks like they are going for it.

2006-10-27T11:35:00.000-07:00

1382 is the line in the sand for ES.

2006-10-27T11:25:00.000-07:00

They are doing the best they can to hold this one up, but the distribution is evident. ES loses 5 dma at 1387, needs it back. We have a bullish divergence on that last low so it could happen, but I would short rallies now.

2006-10-27T11:06:00.000-07:00

Nq does another bounce off 10 DMA at 1730. After the Feds, it was the same support (1728). We will see if they can hold this today. I am not so sure. In any case, the SPX high yesterday of 1389 was probably it for a while.

2006-10-27T10:44:00.000-07:00

Bulls are not going to win this one today.

2006-10-27T10:02:00.000-07:00

NQ closes the gap and bears put pressure on bulls. YM just can't get above its gap close either. Choppy day.

2006-10-27T09:35:00.000-07:00

QM has clear support now at 60.20, weekly pivot.

2006-10-27T09:22:00.000-07:00

Bulls are keeping the pressure on bears, even on a down day. COmsumer sentiment is helping, but it all rides on gas now. The end of month plays are supporting, no doubt. COMP is back above 2374 and for now, bulls have regained some control. Just be careful of that rising VIX.

2006-10-27T09:04:00.000-07:00

NQ 1750.25 is 50% today. YM saw some bearish divergences at a dble top 61.8% yesterday.

2006-10-27T08:33:00.000-07:00

COMP is right at 2006 highs. Internals are weak, but TRINQ showing support. ES hasn't quite closed the gap. It's a mixed picture and a day to scalp. I would say watch COMP 2374.

2006-10-27T07:30:00.001-07:00

Ths dollar drop should keep on being gold supportive. Oil holds on to 60. It looks like some rotation into commodities.

2006-10-27T07:30:00.000-07:00

Watch ES 1389.50. Let's see if the bulls pull out of this one.

2006-10-26T16:52:00.000-07:00

It was another day to buy the dip, this time NQ 10 DMA. It sure looked lke we were going to get some follow through to the downside until Greenspan spoke and oil fell below 61. In this market, hold your nose, close your eyes and buy support. It has not failed for some time. That day will come and probably very soon but until then trade it, don't love it. Some traders find it hard to switch intraday from short to long or vice-versa and there is nothing wrong with that. Just understand that if you play the short side, hit resistance only and take profits, don't hang around. The long side is still the easier trade, but it is getting riskier everyday, so I would not even hang on to that one either. Frankly, this market is becoming a great money maker for both sides of the trade, regardless of trend, especially this past week. The close has been invariably bullish, but intraday has had many good short set ups.

2006-10-26T16:33:00.000-07:00

We can't leave the COMP out of this since it managed to make a new 2006 high. Upside target if 2374 holds is 2398/2400. Please note that COMP and NDX are both making highs with bearish divergences. Any of the upside targets mentioned are good places to enter short or at the very least take profits on longs.

2006-10-26T16:28:00.000-07:00

NDX daily chart. If 1744 is broken to the upside and held on close, possible upside target is 1773.05. Key support is 1732.

2006-10-26T16:22:00.000-07:00

Updated gold chart. Resistance is 600.80 and 602.50. Support is 594, 590 and 587.

2006-10-26T15:47:00.000-07:00

Updated SPX daily chart.

2006-10-26T13:35:00.000-07:00

Did you catch that sleazy YM drop 10 mns before the MSFT release? I hope they get nailed for that. Those trades should be easy to locate.

2006-10-26T13:15:00.000-07:00

Thank you Al for bumping up gold. You're not so bad after all.

WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said on Thursday that both private investors and central banks were shifting away from the U.S. dollar and toward the euro.

"We're beginning to see some move from the dollar to the euro, both from the private sector ... but also from monetary authorities and central banks," Greenspan told a conference sponsored by the Commercial Finance Association.

His comments pushed the dollar down, a sign that Greenspan, who retired from the U.S. central bank in January, still holds some sway in financial markets.

2006-10-26T13:10:00.000-07:00

SPX closes at 1389.06. How's that for on the money (Dec 00 high was 1389.05). YM and ES take a quick hit post close.

2006-10-26T12:45:00.000-07:00

The game plan might very well be to take SPX to 1400, but it's best to take it one day at a time. The December 2000 high of 1389.05 marked a critical event, the beginning of a confirmed bear market with a close below the 20 month MA. If they ramp it up here, it could be significant and set up SPX 1450.

2006-10-26T12:26:00.000-07:00

That ES high met some sellers. I was either banking on SPX 1383 or 1389, they gave us the latter, but note that both met selling. This one has a better chance of sticking as it coincided with an NDX fib as well.
This entire rally has been set up by giving everyone the biggest fears in May and running up the shorts on a wall of worry. Nevertheless, fundamentally, nothing has changed since the May sell-off, in fact, earnings are lowered in most cases. If they were scaring you to death in May and telling you now that everything is fine, they were either lying then or lying now. You choose. Swing traders and daytraders don't care either way, but the average Joe could be in for a surprise after the elections.
You may have noted that I am doing most of my posts on this site now. It will remain this way. I will on occasion give readers on the other site some tips, but for the most part, the action will be here. I plan on improving the system, so bear with me.

2006-10-26T12:07:00.000-07:00

SPX reaches 1389, my secondary high target (Dec 2000) and 100% projection September.

2006-10-26T11:42:00.000-07:00

NDX hits 1744, 76.4% 2006 with a solid bearish divergence (NQ 1757). It's also getting close to QQQQ 43 call resistance. YM is having problems today and is weak below 12206, 100% projection September. It's a tough day for shorts, but bulls should be aware of resistance. BIX has not made a higher high along with ES and NQ. Still feels suspect with TRIN and TRINNQ still above 1.

2006-10-26T11:11:00.000-07:00

Retailers and banks still haven't made new highs, although NQ has. A little odd, especially with TRIN and TRINNAQ above 1.

2006-10-26T10:45:00.000-07:00

Here comes the obligatory test of overnight highs for ES. Amazing resilience.

2006-10-26T10:28:00.000-07:00

NQ 1743 is weekly R1.

2006-10-26T10:27:00.000-07:00

Once we are done with the short coverings stabs, you can see the buyer exhasution. These advances are getting painfully slow.

2006-10-26T09:48:00.000-07:00

Let's call this the Greenspan stop run bounce (he's making sure he gets those speaking engagement fees). Oil is back up above 61, with a double bottom at pivot and equities are still rallying even though the opening news was pretty lame. Normally, these events lead to a down day at the close but frankly, no one knows anymore how any day will finish. ES 1389.50 is still resistance with an overthrow at 1390.50, 61.8% today. Above that, they will go for the overnight highs at 1393.75.

2006-10-26T09:36:00.000-07:00

Feel manipulated? It's not your imagination. You are. All these stop run pushes occur in low volume trading hours when we get down days. We all know what's going on, no need to beat the story any further, but this is not a sell and hold envrionment. Trade it.

2006-10-26T09:22:00.000-07:00

Bulls are back, but watch ES 1389.50, weekly R2.

2006-10-26T09:10:00.000-07:00

NQ 1739 is R, 61.8% today and confluence 10 and 20 ema hourly.

2006-10-26T08:54:00.000-07:00

Greenspan comes to the rescue with some positive comments (...). Oil drops below 61 and now bulls better hold on to that ball.

2006-10-26T08:38:00.000-07:00

Pre-lunch uptick, we will have to see if it is the start of something bigger to the upside or just a bounce in down day.

2006-10-26T08:28:00.000-07:00

QM bounced off pivot and is now back above 61. The bear flags are confirming for NQ and we could see some more selling. Hard to tell, we have been fooled before. It all depends on oil now.

2006-10-26T08:09:00.000-07:00

Second bear flag for NQ. Not what bulls wanted to see. Bears are in control below 1735 for NQ. But these days...

2006-10-26T08:04:00.000-07:00

Oil drops and bulls get a break. NQ 1728/1729 holds (10 DMA). Let's see if they sell the bounce.

2006-10-26T07:52:00.000-07:00

Cracking at the seams and falling apart. If NQ loses 1728/1729, it's over.

2006-10-26T07:19:00.000-07:00

The drop is labored. They could have one more stop run push to the upside in them. But wath ES 1389.50 for any sign of failure. Resistance is 1392.25, 1395.25, 1396.50 and 1398.50.

2006-10-26T06:36:00.000-07:00

YM is becoming the weakest link.

2006-10-26T06:16:00.000-07:00

Watch QM 61.875 key resistance.

2006-10-26T06:12:00.000-07:00

WASHINGTON (MarketWatch) -- Demand for U.S.-made durable goods soared 7.8% in September, the biggest jump in six years, as orders for new aircraft nearly tripled, the government said Thursday.
Outside transportation, however, new orders rose just 0.1%, marking the first increase in three months.
The jump in last month's new orders for big-ticket items far exceeded the 2.9% gain expected by economists surveyed by MarketWatch. It's the first gain in three months.
The increase came almost entirely from a jump in orders booked by Boeing Co.

2006-10-26T06:06:00.000-07:00

Gold is on a tear and looks ready to challenge the 600 level once again. This time, it should hold be able to keep it if it gets it.

2006-10-26T06:01:00.000-07:00

The XOM numbers will probably raise the windfall profit tax issue on oil companies especially if a democratic congress is in power. It will be interesting to see how this unfolds, although a veto would be pretty much assured. The price of gas at the pump in the coming months will be a determining factor.

2006-10-26T02:10:00.000-07:00

They blew ES right past resistance and R1. The pump machine is alive and well in the overnight session. However YM is below R1 and NQ did not even make it there. Watch ES 1392.25 now and see if it holds as support. If not, it's back down to 1390. Above that, 1395.50 comes into play, then 1396.50 and 1398.50.

2006-10-26T00:08:00.000-07:00

Speaking of YM, how about this chart. Toppy...

2006-10-25T23:48:00.000-07:00

I just mentioned ES 1390.25 and we hit 1390.50, but in my defense the 61.8% projection from last week was 1390.29, so let's not quibble. Close enough. It will be interesting to see if it pans out. R1 is higher at 1392.25, but NQ is still lagging (as far as new highs) so there is a chance 1390.50 was it and it does line up with YM 12198, a hair below 12200. They like those century marks. You do get the sense that 1398/1400 is targeted, but will it be a straight line from here? That would surprise me, especially since we have almost two weeks before the elections. But who knows. When cash opens, keep an eye on SPX 1383.37, 2001 high.

2006-10-25T23:44:00.000-07:00

Watching the overnight action, I can't help but notice that once again ES is making new highs without NQ, at least for now. It's just amazing, but par for the course these days.

2006-10-25T22:58:00.000-07:00

Oct. 26 (Bloomberg) -- Taiwan Semiconductor Manufacturing Co., the world's largest maker of customized chips, Co., reported its smallest profit increase in a year on weaker demand for semiconductors used in cell-phones and consumer electronics.

Third-quarter net income gained 33 percent to NT$32.5 billion ($977 million), or NT$1.26 a share, from NT$24.5 billion, or 95 NT cents, a year earlier, the Hsinchu, Taiwan-based company said in a statement today. Nine analysts surveyed by Bloomberg had a median estimate of NT$31.7 billion.

Taiwan Semiconductor's customers are reducing orders for custom-made chips as handset manufacturers such as Motorola Inc. try to clear stock because of slowing sales. Concern that U.S. economic growth and consumer demand may be dented by higher interest rates and oil prices next year may delay chip orders.

2006-10-25T22:33:00.000-07:00

ES has that 100% projection from September at 1398.50, but before we get there, I mentioned SPX 2001 high at 1383.37. If we look at ES fib projections from last week on this hourly chart, we can clearly see the resistance levels (1386.50, 38.2% is precise). 61.8% is 1390.25, and that woudl not exceed SPX 2001 high by much and could be the overnight high should crude keep a bid. If we do move above 1390.25, next stop is 100% last week at 1396.50 and then of course 1398.50. But for now, let's stick with 1390.25, a big hurdle.

2006-10-25T17:25:00.000-07:00

On this SPX daily chart, you can see how we hit the January 2001 high of 1383.37 and retreated slightly. That was my upside target for the index (see yesterday), but if we close above, we should be headed for 1389, which is also 100% projection September. The ES chart has that number at 1398.50. ES 1389.50 pretty much corresponds to the 2001 high for the cash index. This is a defining moment for the markets.
Note that retailers, banks and techs are not making new highs, although the banks are close. It's nevertheless a red flag as far as I'm concerned, but we all know what has been going on with ES futures the past few weeks. Logic has nothing to do with it, it's all about headlines in the press and the elections. But it's not going to be that easy now as lots of money is at stake and you can bet some hedge funds are not with the plan and do not intend on sinking with the ship come November.

2006-10-25T12:07:00.000-07:00

Watch VIX 10.60. It has marked turning points all year.

2006-10-25T11:31:00.000-07:00

SPX tags my high target of 1383 after all. Techs are lagging while SPX makes new highs.
The dollar drops and oil rallies some more, so gold keeps the bid above 590.