Market Comment

Markets in general are due for a meaningful short term correction.

( S&P 500 Index 1484)

Market Comment (S & P 500 1409)

The other day in a blog I said that I assume that we are passing a short term high in an intermediate term uptrend channel for markets in general. I'm expecting a meaningful correction here, and it's already showing up in Canadian markets.

I have repeatedly commented in recent blogs to the effect that Oil is hanging on by its teeth in the $60 area. It's not beautiful, but it's interesting because it has already seen a significant correction, so may be more defensive than the rest.

I have said that I believe that "cash is king" until a general market short term correction comes to pass and goes to completion.

Market Comment

The quick market run-up into the U.S. Thanksgiving was an abrupt short term spike, as I see it.

A sharp short term setback ahead?

S&P 500 Index (1401)

Market Comment

Back in July/06, when I called for an unusual seasonal market recovery into the fall, I didn't realize that markets were foreshadowing a Democratic sweep of the U.S. Congress and Senate. Markets have a habit of recovering when the Democrats win.

More recently, I have predicted a possible setback in the price of Gold. If money was parked in Gold while the Republicans were in charge, it should now flood back into U.S. markets, leaving Gold in the dust - so my Gold call may also be hinged to the Democratic election success.

Shortly after Mr. Bush was elected (yr 2000), a huge wave of selling hit the U.S. Dollar, and the downside pressure did not let up for a full five years. The extent of this debacle leaves no question as to who is in charge on Wall Street. Now my models are suggesting the potential for a sustained U.S. Dollar recovery in the offing - once again, as I see it, tied to the outcome of mid-term elections.

If I'm right about this, my market call, my Gold call, and my U.S. Dollar call, may all turn out to have been proxies for the outcome of the recent elections in the States. It's rare, but every once in awhile I have the feeling that I might be getting a glimpse of the big picture.

Market Comment

It will not be surprising to see a broad short term market correction develop as we move further into the month of October. If such a correction does take hold, you can expect to see bears come forth in a loud chorus of prognostications simply because of the problems widely recognized as symptomatic of October trading action.

While I am very respectful of the history of trading difficulties in October, at this point my work suggests a short term correction as opposed to an October debacle.

If and when we do see a correction, I intend to monitor it carefully. All long term problems start out as short term problems.

Friday closes:
DJII (11,850)
S & P 500 (1349)
Nasdaq (2300)
TSX (11,691)

Market Comment

I follow a variety of indexes, currencies and commodity prices and make an effort to review each forecast on a weekly basis.

While I cannot guarantee this, readers may assume that the most recent comment on any index, currency or commodity followed, is my up-to-date opinion.