Dow cash high today, Wed April 21st high tick at 11,217….21 points from the 62% retracement goal I wrote about last week. In the S&P Cash, today’s high was 1,210… just 18 handles away from the 62% retracement level at 1,228….
Will we get the exact print? I think so, yes. Most likely, because its a target of knowledge at this point.
Those prints will get out in the next 3 to 4 weeks almost because its a self-fulfilling target.
Similarly to a very common situation where there is a “Known” large order resting above or below a market. Once that order becomes common knowledge, if there is size there, there will be market forces which attract the trade to that level. Large orders, like largely known technical areas of support or resistance attract trade. Period.
I always felt that large block trades or orders sitting in an open outcry or for that matter on a screen format as well, are almost guaranteed to be filled. The market always goes to size bids or offers. Always. That much I know after 20 years.
Which is why I am still bullish on the Dow rallying to 11, 465. That would mark a 5,000 point move from the March 2009 lows. Its just too tempting a target.
Will there be fits and starts on the way there? Absolutely. Will there be large traders intent on not letting that print get out? Absolutely, and they will keep the offers coming for as long as they can. Similarly to the resistance we saw in getting an 11,000 print out.
We have yet to see the large institutions throw in the towel on the bearishness and light the buy fuse. But the pressure continues to build. Every day we have where we don’t get a major sell off started is more pressure on the lid which will eventually blow higher.
This market has absorbed bad news after bad news after bad news and has climbed the wall of worry, fretting and kicking all the way. The time to run will be when CNBC is interviewing some hedge fund guru on Power Punch or what ever, extolling how his crystal ball was and is the best, and he now sees Dow 25000 and Nasdaq 6000.
The final nail in the bull run will be if some liberal left wing politician takes to the air waves, extolling the ‘rightness’ of their crew’s policy ilk, pointing to higher markets as a vote of confidence. Right about then is when you’ll want to make sure you have 6 months of food, fuel, canned goods and water literally and figuratively saved up…Along with a ton of cash handy to buy choice stocks which will undoubtedly go on sale in another ‘correction fueled by those damn speculators in Wall Street’.
Markets are markets, fueled by human emotions of fear, greed, ego, envy, love and hatred. That is why we continue to have and will always have bubbles and a business cycle. No generation has ever cornered the market on greed or stupidity.
They only think their generation has seen it for the first time. From the Mississippi Scheme, Tulip Mania, The 1849 Gold Rush, The Teapot Dome Scandal, Gary Tsai and the nifty 50in the 1970’s, The crash of 29 and 87 and most recently, of 2007-2009, back to Mike Milken in the 80’s and Ivan Boesky, It Never Ends.
That’s what you have to know. It will always be something. Some pundit will be talking about a ‘culture of greed’ in NY, or continuous political scandals. The markets survive, and thrive, despite the naysayers and doomsday guys walking around with “The End is Near” sand which boards draped over their torsos.
Up until the age of the Internet, it was common to see people walking around with those signs in public places. Now these same nuts sit in Starbucks typing away on their blogs. That’s about the only difference I can see. And I was only born in 1966.