Bear Market Rally

We finally get some upside after being in the crapper for so long you forget what its like for the market to move higher. The CNBC folk are already talking end of the bear. I'm starting to hear it every place. Hey this is great -- but its a freakin bounce from not even the cellar. A dead cat bounce from below the cellar really. Don't get sucked in, don't let those media SOBs (cnbc, fox, craemer, barrons, talking heads of all stripes, value mavens, Kudlow like dirtbags, etc...)  mess with your head. Take your time -- time is on your side. If you are going to get in, do it a little at a time on your terms, not the market's.

One look at the chart, and the formidable overhead resistance depicts  the horrible place we've been to and gotten our selves into. What transpired was/is really bad, and this ain't no bull market - not even close. What a f....ing disaster. The place to get out (in hindsight) was in that 8000 - 9000 range.  Blowing into 100% cash on December 31st was the thing to do. I didn't do it - wish I did. 

The good news is we took out the Nov. 20th, 7552.29, close. That was the first obstacle to over come. There are plenty more.   If we take out 8000, that's good since1)  it gets us back into the big trading range at least, and 2) gets above the 50d mva. For starters,  it would be nice to see the Dow stay in the confines of the range and to see the 50d mva turn up. For what its worth, I think we are going to stay in this trading range for quite a long time. Maybe a year, maybe 2 or 3 years, maybe longer - no idea how long. The mid point is the 9000 area and 9500 is going to be hell to get through.  I believe that this is an area you'd want to sell into - at least in the first attempts we make at these levels. Lots of money bought in this range (bargains galore) and that's where they'll be gettin back to even. That's where the selling is going to be and lots of it -- at first. 

The BIGGIE is the November 4th close at 9625.28. That's where Dow Theory gives a buy signal for the Industrials  at this juncture. 

The Transports are a bit weaker than the Industrials. Still below it's 50d mva and initial resistance level. 

Anyway the November 4th  close of 4071.81 is the Key close at this point in the Transports. Both indexes need to take out these significant highs for a Dow Theory Bull Market signal. One is not enough. Both are needed. They don't have to be made on the same day. It's a long ways away. Conclusion - This is an absolute mess but getting slightly better. I hope it continues.