Saturday, October 10, 2009

Market update week ending Oct. 9, 2009

I decided to put some charts up today to give you a perspective on what I have been saying vs. what the charts are showing as we approach the 3rd week of October and Options expiration on Friday, Oct. 16th. The first chart is a 3 year chart of the Dow which was posted on August 8th. At that time I described what I thought the market might do going forward.

I quote, "For the Dow it says that we will not go over 10,000 and on the S&P 500 we will not go over 1090, but there is still the possibility of some good gains in the meantime.... But let me be clear here, there is more pain ahead short term for short positions and those wanting to get out should."

From the second chart, not much has changed since then as shown in the Updated 3 year Dow chart. We are staying below 10,000. Those who were short did experience more pain as the Dow did continue to go up from that first chart date of Aug. 8th but it seems to be hitting up against the resistance line of 10,000. Will we have a correction by this coming Friday, Oct. 16th. Well based upon everything I see reported and people I listen to, we may pull back just enough to complete a "W" pattern, but I do not believe it will be the sharp drop off many, including myself, have expected. We may continue to go sideways staying under 10,000 for another 4-5 weeks until after Thanksgiving when we get indications about this year's Christmas Retail Sales projections.

A bit longer term into January and February I do not see us going and staying over Dow 10,000, as the economy should really bottom at that time, with an increase in Commercial Real estate foreclosures become more apparent and the Unemployment rate goes over 10.3%. This will have even more consequences for the Democratic Party as it faces few months to show any meaningful employment before Congressional mid term elections next year. Much can go wrong between now and then as currency concerns over the dollar provide more pressure on the Obama Administration to do something about it at a time when we are most vulnerable to a double dip recession, which by the way I believe we are going to have. Commodities will rise even more sharply hitting continued highs and then drop again as we go back into the recession.

I must stop now as I feel like I have been channeling some spirit who has guided my fingers on these keys of my computer. I don't know if it is a good spirit looking out for us or a bad one. I guess time will tell! :)

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Blogger Minneloushe said...

Charles, I just want to wish you and your talented wife a very good Columbus Day weekend. My 20 year old daughter is in Paris, learning her third and fourth languages - Born in Korea, moved here in 2001, studied French and Japanese, and now immersing herself in "Ouesterne" Kulcha, and learning more Kanji online. No Wunderkind, just a good heart and true, without masks or pretenses. As for me, I'm listening to Bruno Walter do Beethoven, so what could be bad ?

12:37 PM  
Blogger Charles Amico said...

Thanks a lot. I'll pass on to my wife your comment. She is quite talented and it is nice for others to see it as it helps validate her art. Also, you know Christopher Columbus is our patron Saint, being Italian and all.

12:44 PM  
Blogger Minneloushe said...

Well, if I were going to choose an Italian patron saint, I guess before I'd pick Columbus, who was not such a great guy, I'd choose someone like Leonardo, Vivaldi or Puccini ! It's grey here, today, but I think I'll go to the Met Museum and catch the Vermeer "Milk Maid" later. Not Italian, but still great.

4:56 AM  

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