The old Chinese proverb regarding mind control is “Kill the chickens to scare the monkeys.” We have just witnessed an example of this, complete with spurious trendline breaks. Meanwhile we have scared the pants off uneducated investors — and some sophisticated investors too. Smart money (?) seized on oversold prices and lit a rocket which is still soaring. Our analysis of the pattern proved dead right on. It is an alphbetaetc. Naturally there has to be a short term reaction to prices which have boomed like this, but the long term appears clear. In fact the PnF method looks for a target of 2380.
With the SPX back over 2000 and a hair from a new high the market in general has too many buy signals to record. In fact it looks like buy season on everything. The Qs, the $RUT, the dollar. These are nicely balanced by shorts in the metals which just gave a sell signal.
Breakaway gap in the Qs.
Little beknowst to the talking heads and pundits and Marketwatch nattering nabobs, the reason for all this is as obvious as the nose on your face — massive sunspots and turmoil. And, on Halloween, creeping lava.