Monday

Good Morning….What The ?!!

Good morning fellow traders. Whilst you were tucked in bed, we have been holding the (Bear) Fort which is once again under assault. The Dow surged to 10580, a new high. The S&P hit 1119, and pulled back sharply. Hang Seng and China once again played dead by falling 1.7%, only to recover before the close (and then falling back again!). India’s NIFTY tried again to push above the 5180 resistance level, but failed for now.

I am actually happy with the rally (this time the excuse was Dubai has been bailed by Abu Dhabi), as I am getting sick with markets going no where. Common bulls, get this over and done with! I am short, and I wish to short more at higher levels - so push hard and get the Dow up to 11300. My call options are ready to take the brunt of the rally above 10700 - but will expire on the 18th Dec! So, time is running out. I rather not have to throw more good money down the drain for insurance.

We see two scenarios from here:

1. Markets rally to the vicinity of 11300 acutely within 1 week, then fall back. (11300 would then be the high for years to come).Refer to Chart below.

2. Markets fall back from here pre-Christmas (unexpectedly), to 9000, then rally in Feb to a new high to hit 11300 before falling back.

1937vs2007fibonacci2