Thursday Nov 24, 2011
Many analysts have proclaimed that 2008 is back again. This ignores the under performance of VIX and the fact that TLT is already back to its October 2011 highs. THe US Dollar is also near its recent highs that drove stocks to the Oct lows. Let's look.
SPX
A 61.8% re race of the move up from October is 1158, the market closed at 1161.THe uptrend line from the August low in pink comes in at this level.
UUP is the Dollar in green bars. It only lacks a half point to double top at the October level.
SPX is in red since the headlines are all screaming disaster but can still be argued that it will make a higher low.
At bottom TLT is also in the process of double topping. The bond auction was well received with investors . Here is the quote from the WSJ
Underlining the global hunger for safe assets, the US govt sold $35 B in five year notes Tuesday at a record low yield of .937%.
The fear level is so high that investors are willing to take the RECORD low of less than one percent for the next FIVE YEARS. Folks, that is a high fear level.
Such numbers are coincident with bear market bottoms like November 2008. No I don't expect a rally similar to that one but I do expect that all this rear view mirror this must be 2008 again pessimism must be swept aside, all must lurch back into the market by 2012 and THEN the wheels come off.
Insider buying has intensified. The ratio of buys to sells has soared this past week. The inside guys are usually right.
RL
Echoing the FIB re trace in the SPX, Ralph Lauren touched its 61.8% as well at 138. Notice that even with the market down by day's end, RL then reversed, and rallied from 138.08 to 141.79, 3.7 points, a 2% rally. Finally notice that RL remains in a solid uptrend. Ralph Lauren has been one of the better performing stocks hitting an all time high at the end of the October rally. The smart money appears to have snapped up shares of RL starting at 10 AM yesterday morning. The hourly MACD bottomed and turned up.
Black Friday Special = 35% Off Recent GDXJ Prices, Any takers?
GDXJ
The fall from 42 to 27 is a 35% drop. I have promised readers I would eventually identify a place to accumulate gold and silver in some fashion. This is it. I don't know of course if it goes lower still, but a succession of orders should be entered today for tomorrow and next week.
And you can partner with Warren Buffet at 1.26 times book in BRK.B Recall that he announced he was a buyer a month ago, the stock promptly rallied.
Enjoy the holiday!
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