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Favorable signs. At last signs of Santa Claus?

Posted on Dec 23, 2011 by WHC Bassetti.

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The Dow is taking out the recent high — at the lower horizontal line, and apparently will take out the next high as soon as it hears sleigh bells.  Perhaps more importantly it looks like this formation here from early November is a reverse head and shoulders (Kilroy) and a definitive break above the neckline should propel the market into the new year.

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Rimm shot on Oracle. Sound and fury signifying…

Posted on Dec 21, 2011 by WHC Bassetti.

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A 348 point move in the Dow followed by…duh… probably qualifies as an idiot if not Shakespearean move.  Trying to make sense of it from an economic viewpoint would be a waste of time. It was a purely technical move starting a new wave after two eight day waves and an antidote to trader boredom.  We suspect there will be eight days of upwave.  After all the idiots (oops, pundits) are all primed and waiting for the Santa Claus rally.  Since we don’t do cycles or analogues we look at these things with a fresh, if jaundiced, eye.  If we were looking for an analogue here it would be trench warfare in World War I.  Nonetheless long is still the way to be as indicated by the Basing Point stop at 1131.

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Curse of the vampire trendline — and living dead politics

Posted on Dec 17, 2011 by WHC Bassetti.

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Some may say that it is zombie politics cursing the markets, and they would be right.  Not just the living dead politics of Washington, but of Berlin and Paris also in this case.  But the real curse of the markets is the March 09 trendline which, with the cooperation of the brain dead politicians, holds sway over the market.  For all practical purposes most  issues are in sideways trends.  Only idiot savants, traders and cheaters make money in these markets.  Some savants — idiots or not — have been touting the Russell 2000 — and it’s not totally a bad idea to have a piece of it.

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Fool’s gold. Fool’s euro.

Posted on Dec 12, 2011 by WHC Bassetti.

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Today the gold market gave a trading short signal, as illustrated by the gap across the short term trendline.  It is always traumatic for those who have adopted (or married) the gold idea.  This is a trading signal.  We have marked long term stops for long term traders.  Remember.  It’s long term traders who win in the end.  Though sometimes the short term can be painful.  We have marked two stop points, one at 153.95 and a truly long term wave stop at 144.93.  If you contemplate the waves here you can see that the true long term stop is the lower one.  Then of course it is always possible to hedge or scale out of some of a position at the higher stop.  We will probably be shorting ourselves.  Has gold made a fool of us in the past?  Please don’t ask.

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More of more of the more of the same…

Posted on Dec 10, 2011 by WHC Bassetti.

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Or, making sense of the senseless.  From Aug 8 to Oct 21 the market writhed (wrothe?) sideways finally breaking out enough to suck systems in long.  Itr had alread sucked traders in short first week October in the bear trap which we ignored.  The October wave high may still turn out to be a bull trap.  But at least we can interpret what is going on.  The exit from the trading range should in any rationally run universe represent the market’s readiness to rise.

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