Futures are up this morning with the DOW up about 30 points.
The Treasury is using our future tax dollars (won’t be there) to give GMAC a “lifeline.” Not exactly the apple pie and Chevrolet I remember, and it’s definitely not what I would call any semblance of free enterprise anymore either. For they were singing, “BUY, BUY, Miss American pie, I drove my Chevy to the Congress, but the Congressman lied… the day America dieeeeeddddd!”
And more “good” news… home prices plunged another record amount in the month of October, and retail sales plunged more than expected last week as well.
Tensions continue to mount between Israel and Hamas, while tensions also mount between Pakistan and India. Gold, however, is actually down a little this morning.
Yesterday was a turn day and COULD have been a bottom. I’m not betting on that one yet, though. It’s clear to me that the technicals can be read both ways at this juncture, but I’m sorry, the fundamentals cannot be, despite the media’s best attempts. Therefore, I remain steadfast in my call that lower equity prices remain in our future. In the short term, it may be that we just began wave ‘c’ up of the larger correction within wave ‘B’. If so, I would expect that over the next week or two that we would work our way higher to fulfill the inverted H&S pattern up around the 1,000 S&P level. I don’t like that pattern, it’s out of proportion time wise, and my heart and mind just isn’t in this whole rally thing. I don’t see the market behaving in that manner, I see a drowning man who is desperately trying to keep his head above water, that’s what I see. Now I know that makes me a “glass half empty” kind of guy, but hey, that’s what I see while I know that others see a remarkably resilient market that despite horrendous news is doing well, a good sign right? Right? Don’t worry, Alice, the Cheshire cat will be over to visit soon!
So, once again, I’m neutral for today. I have crossed indications on the short term stochastic, we’re caught in a range and I’m not going to get too excited in this low volume environment until we break free one way or the other.
I will be paying very much attention to the bond market in the next few days. TLT and the long bond are having difficulty making further headway and could retrench here. That’s the one play that I am still monitoring right now, oh, and also REITS.
Below is a 3 month chart of TLT (20 yr bond)… am watching for a potential breakdown, note the stochastic sell signal and gap below the 119 level:
Consumer confidence numbers come out in at 10:00 eastern.