Market Comment - Technicals

We are at an important market crossroads. Gold is pushing powerful resistance. Oil has teased above its all time high and fallen back. The S&P 500 Index recently challenged its 2001 all-time high. The U.S. thirty-year Treasury Bond yield has challenged longstanding downtrending resistance and failed.

At the opposite extreme, the U.S. dollar is methodically approaching an historic low support level established back in 1992.

I’m looking for hard-fought intermediate term reversals in all cases. That’s the QUIET outcome. If I’m wrong about this, and we push through these technical barriers in a meaningful way, all HELL will break loose. We will be in an entirely new and uncharted ballgame.

Market Comment (S&P 500 1453)

WOW!! We all know that September has a reputation as a horrible month for markets, and we know that October can be even worse. We all know that we are two days away from the anniversary of the infamous September eleventh tragedy. Did the markets need a kick in the pants at this stage? My answer is a resounding “NO”.

Yesterday, Osama dumped on the U.S. …. Mr. Greenspan told us markets now remind him of 1987 …. and the U.S. Government reported that employment (August) weakened for the first time in four years! Three HUGE kicks on the eve of 911 !!

Greenspan has been my hero ever since the days of Ayn Rand. He is a genius, but this comment was not well advised as I see it, even if he turns out to be correct.

I was around in 1987, and I remember a wildly overheated economy and interest rates bulging at about 10 percent. The U.S. was not short of oil or anything else. The Twin Towers were standing taller than the Tower of Babel. The U.S. was not, as I recall, staggering on its economic knees. In 1987 the market crashed after soaring to a height that was totally irrational. Today, markets have retraced post 2001 losses – nothing more. Hardly frothy.

Greenspan is my hero, but I don’t see a crash on the horizon in my own work. I’ll be pleased if we retest the recent S&P 500 low in the area of 1370, before once again challenging resistance at the all-time high now at 1555

Market Comment - Frenzied Trading

Trading on the day after the September long weekend has shocked market watchers on many occasions in the past. This year, markets have seen wild volatility through much of the month of August, so it seems to me that anything is possible tomorrow.

There is little comfort in the realization that whatever happens on the Tuesday morning following the September long weekend, is often largely retraced by the time the markets close.

BLACK SWANS are more fun than Bell Curves. If markets conformed to Bell Curves, we forecasters would be out of business.