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Topsy Turvy

Interesting.  Asian markets completely in the tank, 1.5 to 2.5% declines.  But Europe, ah Europe, now we have the power elite message that AGAIN, ONCE AGAIN, everything is going to be ok.  All markets there up 2-3%. 

Yes.  US markets will rise today noticeably, perhaps around 200+ points on the DJIA and as much as 25 on the SnP500 to 1160.  The trading elite will continue this for Tuesday as well.  The only economic news today deals with New Home Sales which will be conveniently ignored and much the same for Tuesday and Wednesday.  The supposed US government shutdown will be averted again but I still maintain that the market will NOT go over 1200 this week.

Now, let us look at next week.   Monday there is the ISM Manufacturing Index which will continue bad.  Tuesday we have Dr. Ben Bernanke speaking to Congress, which will be bad.  And then more employment news which will be bad.  And all of this coupled with "inaction on the part of European leaders".

This sets up for a serious market kick in the head for next week.  Assuming US market does not exceed 1200 this week, maybe pushing it at 1185-90, but not exceeding it will be the setup.

If you bought last Thursday and Friday, then maybe Wednesday of this week is your sell day.  IBM bought at 167-168 last week will be selling for 175-6, DE and CAT less bump, but still up a few bucks each, DE around 73 and CAT maybe at 81.  But the chocks have been taken out from the wheels on the commodity slide and the dollar will go up, all metals down, and food stocks leveling out.

Motormouths will keep up the chatter on good things this week.  They will use the word "rally" about every other sentence. 

But SLV at 25 is a buy and I will be buying GLD at 145-150 for sure.  Copper WILL not drop to a buck like 2008.  Forget it.  Metal exchange inventories do not tell the whole story.

I see CCL breaking 35 by Wed-Thur.  The financial stocks will also get a goose since the trading elite cannot goose the commodity stocks.  MS goes to 16, BAC to 7.5, the insurers like LNC and HIG both to 19. 

But the big bang is still coming.  The washout for this period has not finalized and will.