Predictable–to the extreme…

I forget the statistic; 14 of the last 15 Monday’s have been up. Or something like that. After the markdown of last week, the new month starts fresh with nice new money.

All manner of commodities–especially gold–are moving up quickly to test their near-term downtrend lines. The dollar (DXY) challenged 80 but has been turned away by stiff resistance. The dollar will now pull back, giving the all clear signal to buy everything else–at least up to major resistance or a testing of the near-term downtrend lines.

Volume is once again punk but breadth is half-way decent. Everything related to energy, commodities and industrials are bouncing sharply. Tech (sans AMZN) is also bouncing nicely today, though nothing to write home about.

Today’s rally appears to be mostly the beginning-of-the-month allocators plus the no-end-of-the-world shorts covering. It is not generally believed–at least by the one-way market crowd.

The consistant and relentless up market of the past ten months looks like history. Therefore we will probably rally to test the highs and maybe make a new marginal one before going below 10k. And yes, we should break 10k as we estabish a new trading range in order to digest the crash and snapback that has been our history over the past 18 months.

Take the time we crashed and recovered and divide it by 2 and you’ll get the time for the consolidation phase. This “rule” didn’t work in 2003-2004 as the consolidation lasted almost 2 years–almost exactly as long as the crash and recovery, until the 2006 breakout to new highs. If that happens now, then expect a boring trading range between 9500-10500 until 2012. Not a pleasant thought to you mo-mo’s.

Keep your eyes on semi-capital equipment. I like KLIC here below $5. Feel free to buy anywhere below 5 with a 4 stop and an 8 target.