The US equity market continues to push higher, with the sp' hitting a new high of 1764.99 today. Similarly, the 'old leader' - Transports, hit 7060. With continuing QE, and a near total absence of sell side volume, the market looks set to broadly climb into November, if not all the way into December.
sp'weekly8
Summary
Perhaps most notable is that the weekly upper bollinger has now risen into the low 1770s. So...equity bulls have another 1-2% upside viable in the immediate term. Certainly, the 1790/1800s do not look viable until mid November.
No doubt, the weekly cycle will rollover 'sometime' soon. It might be as soon as this week (although I'd guess...no)...reasonable chance of maxing out in mid/late November, and a high chance of selling lower once we move into December.
If we're in the mid/upper sp'1800s by early December, there will be some very (and entirely understandable) high amounts of year end profit taking.
Whats wrong with the DAX?
First, lets take a look....DAX, monthly, 20yr
I see continued sporadic postings from a number of people out there highlighting various world indexes, not least of which is the German DAX.
As of the Monday close, with just 3 trading days left of October, the DAX is up 4.5% - a very significant gain on any basis. Like most other markets, the DAX has been battling higher since the intermediate lows of autumn 2011. In fact, in just TWO years..the DAX is up 80%! Were the Dow up the equivalent, we'd be looking at Dow 18000.
Yet, I see more (dare I suggest), doomer bear postings that the DAX is ready (along with other world indexes), for a major fall. Huh? Am I just in the twilight zone right now? I see an index up 80% in two years, with October gains of 4.5%, and that is BEARISH in the eyes of some out there?
Other world indexes look similarly strong. Even the EU PIIGS of Spain and Italy are still showing good gains for this month, with likely follow through into Nov/December.
Frankly..there is absolutely NOTHING 'wrong' with the DAX. It is outright bullish (it would be classified as MARCON'7), mid-term upside target is 9500/9750. 10k will be tough to break/hold above, and seems unlikely until late 2014/early 2015.
*I will do the usual 'World Monthly Indexes' update this coming weekend.
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Looking ahead
Some of the econ-data (notably retail sales) is still delayed due to the recent shutdown. However, there is Case-Shiller HPI, and consumer confidence. Frankly though, I don't think Mr Market particularly cares about either of those.
What matters is the continuation of QE. Indeed, for many, it remains a case of 'bad news is good news', in that the QE will more likely continue at the current rate into spring 2014.
*there is no sig' QE-pomo until at least Friday.
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Struggling onward
I realise many of the remaining bears out there are finding this latest equity ramp especially tough, not least since it comes after the proverbial can has again been kicked (if only for a few months) along the road. All those who were touting the imminent Zombie Apocalypse - via a debt ceiling breach, they sure are quiet right now. Yet..they'll return to tout their bearish hysteria in Jan/Feb'2014
I myself am certainly 'having issues' with this market. I continue to read all the regular sites, many of which are relentlessly calling for that elusive 'major correction'. Surely, it is now clear, that is off the table until next year, and probably no earlier than late spring? We're talking about another 4-6 months of waiting, certainly not days..or weeks.
My own personal primary objective remains to at least 'still be around', when this nonsense finally does peak. Right now, that still looks to be a good two years away. For many, I realise that is too long to wait.
It has also really started to sink in that if I'm right (about another two years for a multi-year equity peak), I'll increasingly be noted as the most bizarre 'Permabear' out there. Ohh, and yes, I did consider a change of name, but I'll stick with what I originally chose.
Goodnight from London
