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. 

Bad to Worse

The market action late last week and Monday is the icing on the cake.  The  market is voting that the Obama White House is not up to the job. Instead the new administration, so says the stock market, is exacerbating our economic problems. The decline of this market is really incredible. And it doesn't appear that it's going to stop. Gosh, we're only 700 points from 6000. My guess is that it stabilizes in  the 5500 - 6000 range into 2010.   I'm a seller. Trying to raise cash and getting out of any positions that I was holding from a longer term perspective. 

The liberals are in charge, for the time being, and it ain't going to be pretty. Also at this early juncture,  the smart money says that, President Obama will likely suffer the same fate as President Carter. One Term. He had his window of opportunity to act early.  The market, looking ahead doesn't like what it sees. You have to take into account that this is after we've already crashed. I wonder what LBJ would be doing now? Probably something similar to the 2009 version of the Great Society. Knowing what we know now, would President Obama win the election if it were held tomorrow? Doubtful. This Tim Geither is just terrible. My guess is he's gone by September. If the Obama miracle thrusts our economy into depression, I think we finally bottom out in the 2500 - 4000 range. Are we in a depression now? Might be. I really don't know. God I hope I'm wrong.