The 'bulls' are running out of steam again since this was nothing else but short covering. There is a small margin for new highs within the next days as the 50% retracement level is at 1125 for the SPX - but just let me say - the longer the sucker rally lasts the steeper will be the correction. I had expected a retest of the highs for Dec and modest new highs probably. Scenario needs now to be altered after making some homework on the Saturn / Pluto square I saw that the effect the last 100 years was rather a bit after the exact day 1-3 weeks but the result was quite steep of 30-40% confirming my retest of the lows scenario. The worst case scenario for the stress tests was 10.2 % jobless rate in 2010 which we have reached already by Oct 2009. Reaching that mark far quicker than anticipated and the real rate being rather close to 20%. The losses in the bank balance cheats are much more disastrous than anticipated ( and stated by the banks) by the FED and we will see at some point those effects hitting the market but rather at a stage where it might be too late.
Tuesday, November 10, 2009
SPX update
The 'bulls' are running out of steam again since this was nothing else but short covering. There is a small margin for new highs within the next days as the 50% retracement level is at 1125 for the SPX - but just let me say - the longer the sucker rally lasts the steeper will be the correction. I had expected a retest of the highs for Dec and modest new highs probably. Scenario needs now to be altered after making some homework on the Saturn / Pluto square I saw that the effect the last 100 years was rather a bit after the exact day 1-3 weeks but the result was quite steep of 30-40% confirming my retest of the lows scenario. The worst case scenario for the stress tests was 10.2 % jobless rate in 2010 which we have reached already by Oct 2009. Reaching that mark far quicker than anticipated and the real rate being rather close to 20%. The losses in the bank balance cheats are much more disastrous than anticipated ( and stated by the banks) by the FED and we will see at some point those effects hitting the market but rather at a stage where it might be too late.
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What will be the catalyst for a really big sell off? Everyone expects a correction in October or November and a rise into year-end. Almost all bears expect a sharp sell off in Q1 or Q2 2010. (some in Q3 or Q4 2010) It won't happen if everyone expects it.
I think that the most likely thing is that the market rises beyond anyones imagination and the crashes completely unexpectedly in 2011.
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