this rally is not over.... yes we will see an all time high in the dow this week and beyond. There are 2 forces causing this..... inflation being put at ease through falling key sectors, and oil producing nations uneasy with the price of oil, they will ensure oil does not get back up into $70 + for a while. (for those who think arab nations only what the highest possible price for oil.... you are mistaken. like having a goose that lays golden eggs at home... you dont choke the goose's neck demanding more eggs).....as the price of oil eases, so does the talk of alternetive energy. Large $$ now flowing into large cap and consumer staple stocks...(sectors where i went all in in my mutual funds 8 weeks ago)....... ... bulls are running loose....
hey my man, missed you, welcome back. this cat thorn been laying low all week, lynch mob lookin for him. i's gots a feelin that tomorrow is going to rock hard to da upside. oh yea baby,,its da shack
I made this call back on 9/26/06 .... and look what has happened to oil! What a great call! (Oil will continue to slip for quite a while!)
This feels like a top right here, waiting for trading to confirm as soon as next week opens. World markets are also at tops, India, China, S America etc. Will be similar to May 2006 i reckon
What is causing the rally is programmed trading. Programmed or "black box" trading has been around since the late 70s. This is where a computer reacts to specific events and trades accordingly. You will have noticed that when a small plane struck a building in NYC, all of a sudden there was a market pullback. Those of us who live and work in NYC knew immediately that it was not an act of terrorism. However, when it was announced on Reuters, the computers picked it up and started to walk back into the market. Most of the trading that is done nowadays is by computers. All we can do is ride the wave the way the computer is trading. The factors that made the computers trade in the manner they did from June to December have changed. Its a New Year and there is a new set of variables. Notice how there was a sell-off in the OIH 1-2 months before the big sell-off in oil. Notice how there was a rise in the OIH 1-2 months before the election in November. The OIH sells off way before oil tanks and it rises in a similiar fashion when oil is about to rise. Again, this is because of programmed trading. The software notices problems in the industry before anyone else by closely analyzing the news. To prove my point, simply look at the following chart and place it alongside the WTIC chart. http://stockcharts.com/h-sc/ui?s=OIH&p=D&b=3&g=0&id=p78920429940 The huge selloff in oil at the start of the year was because of a computer program reacting to the weather conditions and tanker siting reports. Why else would it suddenly and abrubtly sell-off on a certain date at a certain time? Now that same program will walk the price of oil back up along with the OIH. Dr. Michael Roberts www.marketbarometer.blogspot.com