Loading ...Don’t Be Fooled By The Coming Sucker’s Rally
The stock market top, especially for the Nasdaq 100, is clearly in. The other averages have also sold off but all of them are going to have a monster rally for one, possibly two days when Congress funds the gov’t. at least for a couple of months. Don’t be fooled. The biggest one or two day rallies come during bear markets and the DJIA will have the biggest splash, quite possibly making a new ATH. It doesn’t matter, it will be just to sucker in as many as possible and won’t last very long. The stock market bear has come out of a 12 year hibernation and isn’t going away any time soon. (This was written last week and has been sitting in my draft folder waiting for events and the charts to set up. I didn’t know McConnell was going to make the offer but pretty much expected a temporary kicking of the can type deal.)
There may be a knee jerk reaction to these Washington antics, but the stock market for the most part will look right through the budget shenanigans. I agree with Chartmaster on this. My assessment is that the bull market likely has ended and it is actually in a hard sell sequence which is the first leg down. My work is pointing towards the NDX topping here around the 20 EMAover the next few days. At that time the opportunity will be with the downside.
My expected targets are the gaps created last Tues. morning (9/28) at around 4435 for the S&P500. Don’t be surprised if the DJIA closes at a new ATH tomorrow to create the big splash headlines in Barron’s over the weekend. A 1 in 3 chance of occurrying, that would be the final “lipstick on the pig” 12 year bull market top and usher in a multi year bear market.
3.5 trillion spending bill will raise eyebrows. Dollar down , stocks down , tesla up
This extension makes passage of that 3.5T bill even less likely.
That said, I continue to disagree with other chart readers here on the broad mkt.
And on PMs, for that matter.
Both are getting to be close calls, so I’m not as adamant as before. I’m just not echoing.
Now see odds of DJIA reaching my forecast of a new ATH tomorrow as two out of three. Also bumping up S&P target to around 4470-4480 rather than stopping at the gap fill. Truly the sucker rally I was looking for.