[youtube:http://www.youtube.com/watch?v=BD5nG2jEVgc&feature=related 450 300]
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The Futures markets in both stocks and commodities is telling us we’re in store for a candy-coated day tomorrow in the markets, all Yom Kippur expiations aside. Many a times I’ve heard “Sell on The (Jewish) New Year and buy back on Yom Kippur” as tradition dictated that many of our Tribal brethren would be out of the market for that week.
I think that may be a bit of an old fashioned play (not many of my Hebraic trader pals took off for the entire week of “the Holidays” and Yom Kippur fell on Saturday this year anyway), but it’s still useful as a historical marker and perhaps an “excuse” for people to come out guns a blazing on that first day after All Sins Have Been Elided.
What better time to start stacking venalities up again for next year, nu?
Coincidentally or not, the current bullish outlook for the market synchs with some longer term market work I was updating this weekend. For instance, this following SPX chart looks at the Fibonacci levels of the last four years, beginning with the October highs of 2007 as “the high Fib” and the March lows of 2009 as “the low Fib.”
Note how we launched all the way back to the 61.8% retrace in April ’10, before selling off hard to the 38.2% fib line in July of that same year? Then we had one more run to 61.8% before retracing briefly once more and finally breaking the bonds of the golden ratio (again, 61.8%) in November of ’10.
Note however, that we never bounced all the way back to the October ’07 highs? That’s because we’re in a bear market cycle, my skepticons, and the bad news is we ain’t done yet.
But that doesn’t mean we can’t still have fun times, even if they grow increasingly scantier, right? So let’s look at where this current selloff has based since this summer shall we? Well, I’ll be kippered (no Hebrew) if it isn’t the 50% fib line providing support!
And I think that given the current position of the weekly stochastics (i.e., “oversold”), we will likely get a nice “Euroliquidity” blast here, quite possibly taking us all the back to that 61.8% golden ratio one last time at $1227 on the above chart.
As a result, I plan to continue with my large QLD position and perhaps even “enhance” it with a little TNA, here. I will skinny my SKFlles to a mere nominal position as I still do not trust the banks, but will also eschew all other negative-minded ETF’s for now. I will likely also continue adding back to my silver and gold miner hordes, mostly through GDX, GDXJ and SIL, with opportunistic forays into SLW, EXK, AG and RGLD.
I reserve the right to change this direction on the turn of a dime, however, if things do not play out as Signor Fibonacci has directed.
In addition, later this week, I will attenuate this chart so you can see some more specific targets for the upcoming “deluge.” And yes, folks, it’s still coming. And time is growing short.
My best to you all.
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