NASDAQ COMP                                     + 73 on 1450 net advances

 

SHORT TERM TREND                            Bullish

 

INTERMEDIATE TERM TREND               Bullish

 

STOCKS :  There’s an old market saying. The stock market won’t let you in on your own terms. I wanted to buy this, but I didn’t want to buy a gap opening. More on this in the trading section below.

       Now to the markets. The reason given for the big move today was that  the weak employment numbers last Friday would keep the Fed from raising rates. 

       Just to see how silly that reasoning is, consider the following: Back on September 18, the Dow lost 290 points on the theory that the Fed failed to raise rates because of a weak economy. 

       We have a different take. We’ve been selling for weeks and the sellers are exhausted. They’re sold out. When you’ve sold all your stock, the only way to get it to decline further is to cheer. 

      The market inhales and exhales. Today it is inhaling. 

 

GOLD:  Gold barely moved. We’ll stay bullish for now.  

 

CHART:  On the initial downleg ending in late August, there were almost 1500 more weekly lows than weekly highs. On the retest, there were around 750. This tells us that the market is firming.

 

BOTTOM LINE:  (Trading)

Our intermediate term system is on a buy as of August 26.

System 7   We missed the price we were looking for. Stay in cash. We’re very overbought. We have to be patient.         

System 8   We are in cash. Stay there.                    

GOLD  We are in cash. Stay there.     

 

News and fundamentals:  The ISM non manufacturing data was 56.9, less than the expected 8.0. On Tuesday we get the trade deficit.

 

Interesting Stuff : Ben Bernanke was on CNBC today, patting himself on the back. If he’s so wonderful, why hasn’t the economy responded better to his QE ad infinitim?

 

TORONTO EXCHAN GE:   Toronto gained 212.                

S&P/TSX VENTURE COMP: The TSX was 4.          

BONDS:  Bonds had a solid down session.                                                                                              

THE REST:  The dollar bounced a bit. Silver surged and crude oil was higher.                                                 

 

Bonds — Bullish since September 4.                           

 

U.S. dollar –Bullish since September 21.                            

 

Euro — Bearish since August 26.

 

Gold —-Bullish since September 24.                              

 

Silver—- Bullish since October 2.                           

 

Crude oil —- Bullish since September 16.                               

 

Toronto Stock Exchange—- Bullish since August 27.    

 

S&P\ TSX Venture Fund — Bullish since August 27.    

 

We are on a long term buy signal for the markets of the U.S., Canada, Britain, Germany and France.  

 INDICATOR PARAMETERS

     Monetary conditions (+2 means the Fed is actively dropping rates; +1 means a bias toward easing. 0 means neutral, -1 means a bias toward tightening, -2 means actively raising rates). RSI (30 or below is oversold, 80 or above is overbought). McClellan Oscillator ( minus 100 is oversold. Plus 100 is overbought). Composite Gauge (5 or below is negative, 13 or above is positive). Composite Gauge five day m.a. (8.0 or below is overbought. 13.0 or above is oversold). CBOE Put Call Ratio ( .80 or below is a negative. 1.00 or above is a positive). Volatility Index, VIX (low teens bearish, high twenties bullish), VIX % single day change. + 5 or greater bullish. -5 or less, bearish. VIX % change 5 day m.a. +3.0 or above bullish, -3.0 or below, bearish. Advances minus declines three day m.a.( +500 is bearish. – 500 is bullish). Supply Demand 5 day m.a. (.45 or below is a positive. .80 or above is a negative). Trading Index (TRIN) 1.40 or above bullish. No level for bearish.

      No guarantees are made. Traders can and do lose money. The publisher may take positions in recommended securities.