Well, is it or isn’t it?

A bull market or a bear market, or what is it? Over the past several weeks the technical picture in the Dow has turned up, and, in fact Schannep with some misgivings has issued a Dow Theory buy signal. A pattern of higher lows and higher highs exists since the March low. Seen here there are a couple of slanted downtrend lines which need to be taken out to confirm a rising market. The rise above what may be a neckline stretching from February can be taken as a buy signal by semi aggressive traders. Frankly we would still be more comfortable with a portfolio with some shorts in it.

Leaving aside the possible neckline in the DIA it looks like the sideways pattern is being challenged but is not yet broken.In fact our black box, deus ex machina HAL 2001 robot and crystal ball says that the buy point is 13393 basis Indu.

This is using the “neckline” as a basing point.

The stop here is down at 859. Sorry, but that’s how far away it is. The point of course is to let the market work and resume its up trend. Gold $1600?It seems to us that the market is stuck in short term thinking. Very short term which is why we think trading tactics are still in order. Someone seems to have forgotten that the dollar is slowly sliding to hell, the country is already on the verge of Hades, the national debt is a cancer on the fiscal body of the nation, the operating deficit is a ticking time bomb, consumer mood is beyond prozac to help and we are about to throw the bums out in Washington and get some new bums. Meanwhile, just to cheer you up we are hemorrhaging blood and dollars in Iraq.

Like it or not (we don’t and you probably won’t either) the stop in the IEF bonds is way down there about 84 or 85. Whether it will bounce off the trend line here or not only Alan Greenspan knows.

The long shadow here to 74.5 is probably a data error. It is no data error that the trend is still down. Look at the number of down trend lines it has to break to get out of the hole. We think the upsurges here are traders busily catching falling knives.How low can it go?

Ask George Bush. He’s the guy who tubed it.

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