The missing blog posting last week was simply due to a busy schedule and several technology and software upgrades that were occurring to better serve KRTT clients.
In the meantime, the shorter term USA Thanksgiving seasonal rally, that I had highlighted in my last blog post indeed took place as predicted. Moreover, the rally has carried on "somewhat" this week.
So now what? Are you ready for change and a possible U turn in the market direction if it happens?
Well as always, good traders and successful proactive investors are defined by their open minds and the willingness to change. After all, the financial markets are dynamic - albeit governed by Natural Law and cycles, little different than the cycles in the weather seasons, day and night, birds migrating or the sunspot cycle.
To state a simple forecast perspective in my financial research position at present, the next two weeks should set apart and absolutely define the bull market versus bear market position.
I think everyone reading this blog already knows what my personal position is, and frankly, has been for several weeks.
If you do not understand that statement, then I suggest that you go back and read the older blog posts beginning in early July with my sixteen week bear market countdown to a fall 2012 market high.
Alternatively, you can read my feature strongly suggesting - "Sell the Ben Bernanke High" announcement immediately after the FED QE3 news which indeed accurately turned out to be the record high for the year.
However, if the bears are in control they must soon come out of their temporary hiding in recent trading sessions, which has now seen the SP 500 Index rise from a November 16th, 2012 low at 1344, to the recent high close (today) at the 1416 price level.
By the way, this recent rally represents a Fibonacci Retracement of 72 points or about a 55% R from the yearly high at 1474 in September with two near 1470 highs in October.
Assuming the bears really stay in control in the near term, the SP 500 is not likely to get much above a 61.8% Fib retracement which is a mere 8 points above today's 1416 close.
Also if the bears are in "true control" and the USA equity indices avoid an all out messy dragged out top into early 2013, then frankly (and scary for the bulls), this recent equity rally high will be the last right hand shoulder high on a chart, before a more serious correction sets in, that could soon confirm further equity losses and a probable impending bear market.
As I have stated before, I use a 20% loss or more as a bear market, and anything less as a correction.
On the optimistic side, if the bulls can somehow regain a firmer grip on USA and Canadian equities to extend the 2012 equity rally run, into the seasonally optimistic December Christmas season at year end, than we should soon see (by next week), a clear-cut equity breakout to at least the top of standard deviation channels.
At present this would put the SP500 up around the 1438 - 1444 level, or about 22 points higher.
Most savvy traders and investors, never try to predict and tell the market "what to do", but rather become seasoned experts at quickly reacting to the news and chart truth.
In other words, investing and then hoping your financial strategy turns out for the best, is usually not as profitable as being proactive and becoming a trained observer of what is happening on the technical charts (which tell the trend and cycle truth).
In my own view (for what it's worth) intellectually at present, I find it very difficult to place a bullish financial bet on the USA government and US politicians properly addressing the sixteen trillion dollar USA national debt crisis, enacting the needed higher USA taxes, and drastically reducing their government spending - all being called the 2013 "fiscal cliff."
So frankly based on the history and track record of politicians, all of the bulls out there, and those with long equity and commodity portfolios at present, are essentially putting their faith and their money bet exactly where Washington and the USA FED wants it; - stay invested.
Meanwhile the bears, based on the recent weeks of trading activity, have been subtly heading for the exit door. December will surely be an interesting month to watch.
It seems to me that sometimes, the best portfolio and trading strategy for many of the less sophisticated or risk adverse is to be on the financial sidelines (out - but waiting to get back in). This may well be one of those excellent times.
One thing is clear.
The next two weeks and December as a whole will logically tell us whether the bulls or bears will be the victor in the next few months. The fiscal cliff may or may not be an ongoing topic of concern into 2013. Time will tell.
See the chart trend and cycle truth below for more.
James Kelly Sr.,
Editor in Chief, BBTL Blog