TOP PICKING

This is intentionally in red as a warning, don't try and do this

Above is the NASCRACK Index so named for it's wild and crazy actions. It is obvious for anyone to see we are just ramping straight up here. Many people are always tempted to try and pick tops in moves like this. I would recommend not doing this. I do think we are close to at least a corrective point just because of the blow off nature and angle of ascension in place here. However, do not ever underestimate momentum in situations like this. It can go on for surprisingly long periods of time. Typically but not always, a big gap up will end these types of things. Last night we had a big run up that has reversed, so I suppose this could be it, but keep in mind there are major market manipulations going on here so this is treacherous trying to short these moves. The balance of power in DC this fall could very well hinge on the stock market staying strong, so you can be sure the PPT will be very active. These elections are possibly the most important of my lifetime, so there is alot at stake here. These fat cats are not going down easily.

There are some cyclical elements coming in next week, so a top of some type in this general area from a time standpoint, makes sense. I see nothing in the indicators above that tell me this is a sell here. As I have written about extensively in here, this is an across the board move, many commodities have risen lock in step with stock prices, the metals, the softs, energies, grains etc.. Does this mean that the big inflation wave is here? Possibly. The Dollar is getting clobberred here and is in a down trend on the weekly charts. The only way to call it anything else is if you are an elliot waver, and even that is a stretch in my mind. They never let stretching get in the way of presentations of their ideas. They have been nothing but gloom and doom and just are wrong for so many months at a time, that it is difficult to make money off their views even when they are correct in the end.

It does appear to me that if we have a correction of a few days or more, that the indicators are going to turn down enough so that the dip will not be a buy signal. It might be that the indicators will have to fully cycle down and back to generate the next buy signal. Time will tell, but it appears to me now that it will be a couple of weeks or more before the next buy signal will trigger here. It is more likely that a sell will develop first.

I am watching the bond market closely here for a bigger picture sell signal. There are many things from the hacks at the water coolers predicting it, to cycles, to COT stuff, that are calling for a large top to be formed in bonds here. When looking at what I look at, I am in that camp as well. I hate being there with everyone else, but as we have seen, hundreds of millions of people can be right about the same thing and the idea can still work. Buy Gold is an example of that.

It is possible there could be a sell signal monday for Bonds, the chart above. However, it is close to the indicators starting to bullishly diverge here, so this is not an obvious bet the farm setup. I will have to look at this over the weekend. We have had 3 consecutive small sell signals here. I have done two of them, not the last one. I am not sure exactly how I am going to play this at the moment. However, over all, we should head down from these levels and I am looking to get in sync with that.