Today has the potential to be a pivotal day. With the release of the monthly jobs report -- the single biggest market moving number -- then we'll know whether the market is going to make its psycho-run to SPX 1150, or whether the rug will get pulled out with a liquidation move back down below 1060.
The crucial weekly close will come today. If it's strong, then 1150 could be in the cards -- and soon. You probably never thought you'd hear me say that, with the VIX and VXO at super low levels, and complacency and rah-rah bullishness all around -- but majority-fueled bubbles have a demonstrated tendency to travel very far, very quickly during the last stage of a move. Exhibit A on that thesis would be the 5-month Nasdaq run from 3000 to 5000 at the tail end of the big Y2K blow-off bubble top. At the end-stage, it just gets ridiculous. This is the same on the downside too, as that swoon in July 2002 demonstrates.
If the uptrend is indeed going to continue, then the blow-off stage would be coming right now. Prices may just completely de-couple from reality and rocket to the upside.
But of course that's still the longshot.
It's more likely we'll see a move down below 1060 that kicks in the "Nikkei scenario", and we could be looking at an explosive 15% to 20% drop heading into January. I think either way, the grinding is about to come to an end, and we should get some sort of galvanizing pressure in one direction very shortly. Today's employment data just might be the trigger.
Sentiment Dashboard
By Adam Oliensis
SENTIMENT TANK: Drained 3 points to 2% full of negative sentiment.
SHORT-TERM: Neutral
MID-TERM: Progressed 10 points to 73% on the Advance side but Confidence regressed to a Neutral 0.
LONG-TERM: Remains at a Neutral 82/18 with Confidence also at a Neutral 0.
BOTTOM LINE: In case it ain't clear, most everything is neutral on the dashboard. Except that the mid-term gauge is in an Advance Phase. But here's the "thing of it." This mid-term advance started with a very low level of fuel in the tank and the mileage on the advance has been terrible. Momentum of sentiment in the mid-term gauge is knocking off 10 points at per day while the market goes nowhere. The mid-term Advance phase is exhausting itself even as the tank flirts with 0%.
The market COULD grind incrementally higher but I continue to look for a dip between now and December 15, in line with seasonal tendencies.
On the magenta line above we see that the average (mean) daily return has a teensy bit of upside between now and December 7, but that what is roughly the "median" return has topped out. We're in a seasonal lull that lasts until December 11. At that point both the mean and median give us the dip we're talking about before Santa Claus (perhaps with Judah Maccabee in tow) flies in bearing gifts.
We'd get more out of the Santa Claus Rally if it were to begin with a little fuel in the tank. (Note: The December 3-4 anomaly of a sharp down day followed by a roughly equally sharp up day played out according to Hoyle despite it looking like neither one would do so intraday. The One-Day Post-Thanksgiving Strength followed by a dip and then a bounce (which we hypothesized over the weekend) is precisely what occurred. Let's see if the Seasonal chart continues to work its MOJO. There's an even more extreme one-day event coming up very soon. Stay tuned!)
O Clubeinvest.com informa que nenhuma da informação
aqui facultada deverá ser entendida como conselho ou recomendação
de qualquer tipo de transacção ou investimento.
