Another day higher for the Transports, with another close in the 5600s. This is way beyond the old resistance level, and the bulls should merely be seeking a weekly close anywhere in the low 5600s. The monthly chart displays a clear breakout, and the next big level will be the psy' level of 6k.
Transports - along with the Rus'2000, are the most volatile of the main indexes, and they certainly do tend to lead the way.
Without question, the tranny is now leading higher and is showing no sign of getting stuck. A hit of the big 6k level seems very viable in February/March, and it then has to be asked..are we looking at Trans 7k later this year? If that is the case, then sp'1600/1700?
Such talk is of course 'crazy talk' to the doomer bears, but then..they've been shamefully wrong for the past four years.
This market is now refuelled by the free (POMO) money, and if the primary dealers funnel it into the indexes, then we are going to ramp even higher than the cheer leaders on clown finance TV could ever dream of.
As for tomorrow, we've lots more data of course, corporate and economic. The market could easily gap over the big '1474 high..and that would open up the 1480/90s..within hours. There are surely a huge amount of short-stops around 1473-75, and it would be a good basis for a renewed wave higher.
Despite that, so long as we don't break 1474, I'm guessing we still see the sp'1440s. The lower gap level of 1425 now looks out of range.
So much for the 'bloodbath'
It was just over 2 weeks ago (Friday Dec 28'th) that Zerohedge got wrapped up in bearish hysteria over an sp' close of down one percent. At the time, their headline of 'bloodbath' I found kinda bizarre. Now, a few weeks after the hyper-ramp back to the sp'1470s, such talk looks embarrassingly laughable.
Its only mid-January and already the bears have been smashed up. It could be a very painful few months ahead for those who battle against the primary trend...and the 'old leader' is quite clear about what that direction is.
Goodnight from London