Market pans healthcare ruling applauds euro bailout

Working in our favor is the Gann symmetry at the bottom in 2008/09, which we’ve discussed dozens of times. But forget the calculations; the behavior of bears is suggesting we remain in an intermediate level bear phase in an embryonic bull market. But that’s even in doubt as housing continues to set new highs.

But that’s one sector and here’s where we are at. I don’t see how this move sustains with a VIX at 17. Let’s do some intelligent hypothesizing. What if the major averages continue higher from here to create a double top? Does that mean we have to endure another correction like the one we just had? The worst fear levels hit with a VIX at 27 and you know how it felt. It wasn’t as bad as last year but still bombarded if not hounded by the prospects of a European Lehman moment. But if the market tops and sells again it will play into the hands of the opposition party trying to take the White House. I believe the market needs an ultimate bottom about 60 days out for the incumbent to win. So the other scenario is we remain in a grinding type of market we’ve anticipated since April with still more twists and turns to come. It also plays into the hands of the challenger who because of the SCOTUS ruling almost has the wind at his back. The only way Romney loses for certain from where we sit now is if the market goes up and stays up.

But this remains a market ruled by smart and non-committed bears and the major hurdle to overcome is a lack of real buying. The first real test came on the Copper chart which tested the October lows when that group of non-committed bears gave up. What you can see is a market where bears control the high end of the range but seem to have little appetite for pushing it beyond the low end. In a week from now it will be 360 days off its 2011 high, we’ll see if that means anything.

For this week, trading should be light given the holiday and we could see swings both ways.

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About the Author
Jeff Greenblatt

Jeff Greenblatt is the author of Breakthrough Strategies For Predicting Any Market, editor of the Fibonacci Forecaster, director of Lucas Wave International, LLC. and a private trader for the past eight years.

Lucas Wave International (https://www.lucaswaveinternational.com) provides forecasts of financial markets via the Fibonacci Forecaster and other reports. The company provides coaching/seminars to teach traders around the world about this cutting edge methodology.

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