Now that we have rocketed up and out of that critical support area that I pointed out, where do we go next?
Well that is a very good question. The obvious targets remain 1122 and 1154, these are numbers I have mentioned before. One is symmetry on our 3 wave rally off the lows, and the other is a 50% retracement. One thing is clear, it is virtually impossible to make money shorting virtually anything except the dollar right now. I do expect this to change, but for the time being fighting this trend, or any other uptrend in other markets is just suicide.
As long as this recent low at the beginning of October holds, I see no reason to get overly excited about shorting the market. Those big picture wave comments I made this weekend, are just that, big picture. There has to be a short term catalyst or movement in the direction of the big picture view to confirm it. We have not had that yet. If we had some type of failure double top right here, that might be one possible indication that things might be changing. However, we have not had that yet.
Almost every timing technique I know to try and pick short term turning points is failing in every market. This tells us the trends are strong. I have made this comment before in here, but will make it one more time. There is something just not right about what is happening in these markets overall. To see all of these intermarket correlations with no fundamental basis continue to hold up is very troubling to me. It is one of these it is different this time scenarios, which usually turn out not to be.
If I can ever figure out some reasonable explanation for this I will post it. You could say it is the dollar, but yet it's normal relationship with other markets is out of whack also. I have not seen the PPT be obviously involved except on Friday for a bit to prop up things after the NFP report. However, other than that there have been very few obvious PPT appearances recently. We can never know for sure when they are active, but there are certain times when it appears to be obvious based on just looking at discounts and premiums and what normally triggers buy programs. Then you see them when none of these conditions exist. I have not observed much of that lately.