The headlines read that Wall Street hit four month highs and is now at the highest point since May. That’s good but not great. We have said that the May highs should hold for a long time. The way the Dow and the SP 500 are trading that statement may be in jeopardy, but the way the players are feeling is much more like a top than a bottom—confidence to spare. We continue to see weaker readings in our technical indicators even with this up move the past few days.
There is very little to say about the action on Wednesday. Mostly the indexes opened a tad lower and then basically were grinding higher all day long but without much enthusiasm. This “bull” market is tired and has very little power in it. The Dow has rallied 200 points in three sessions from low to high. If this truly was a bull move, the Dow would be up 4% in one day and then the next day would be up 4% more.
Whatever the market makes you Feel is not what you should be thinking. We are as tired of this two month rally as we can possibly be but it is near its end and not the beginning of a fresh up move. We have lost quite a bit of money in the past few days but we still believe the next big move is going to be down.
The market has been struggling to keep the rally going even though the real bear has not been wakened from its nap. We have said that the market would drop into the October time frame. Since we are now in the middle of September, it would seem that we are going to have to revise our low point to be later in the year or early next year. We can’t know about the low until we actually see some selling.
The precious metals complex will probably bottom here in the next month or two so we will be watching that carefully. As far as stocks go, we can’t believe this rally has much staying power. Every day that goes by without a turn down, is another day for you to take care of your portfolio.
Dow Industrials: 11,543.32 +45.23