Trick or Treat, Huh ??

Aha, a little trick for the bulls, huh? Halloween goes to the bears, but ultimately, who cares? With my portfolio up well into mid-double digits, I have little trouble giving some back for the next bull onslaught dead ahead. Oh really, you might say? Well friggit, let's look at some evidence. But first, where we stand currently at the end of October, you know that scary, bad for the market, portfolio eating month of October ?



Where we are is pretty much exactly where we would expect to be....prior to a tide low mid week this week. And, we have a Bradley date shortly thereafter pointing to a turn. And we have bears and even weak handed bulls looking down, down, down. You suppose the markets going to accomodate all this bearish sentiment? Highly doubtful, for as we all the know, the markets will never make everyone rich nor even happy, so forget about that.

Take a look at Don Wolanchuk's clx chart below. Here is plotted the 3dma, 10dma and 30dma of the clx as well as the vaunted aydis all along side the relative movement of the dow.

All indications point to higher prices and in short order. Not shown here is the fact that in a couple days (tuesday or wednesday) there will be negative numbers falling off all these dma's such that the averages will surge upward and so will the market with it. You see, each of these averages mimic the dow in particular and the markets in general. For those not familiar with the clx and wanting a short and sweet primer, here it is. The clx measures the stock inventory that the market makers have on hand at any particular time. See, I told you it would be short and sweet.

On to sentiment. Tom Drake's 2cs in particular is plotted below. With end of week action, sentiment has gone over the top as bear froth abounds. Notice how the 2cs has plunged as the vix and p/c ratios gone out of sight. Great fuel for the upcoming blast.

And last, where are we heading? As it now stands, we've only taken out 2 of 7 targets to the upside! See chart below where the 1,100 has been hit but there remain 4 plum targets in the 1,200 zone and one way up there at 1,400 which will get taken out sooner or later. My guess? 1,200 falls easily by the end of the year....1,400 by February/March timeframe. Who knows what additional targets will develop on the glorious journey up? You know there will be blips and beeps and corrections...just keeping my eye on the most important ball in the game.

Sooooooo....short term look for some weakness early next week before everything gets back into alignment.