Stock market action Oct. 5th

Well all the Indexes closed up and the Dow was up 112 to close at 9599.75, close enough to 9600. This on the heals of pre-market comments by Noriel Roubini, where he said we are not going to have a "V" shaped recovery, but more like a "U" shaped recovery. Roubini, you may remember, was the economist who predicted the economiccollapse we faced last year from the Sub Prime loan problem and the Derivatives market, a whole year in advance. You would think with this pronouncement today that the market would have gone down, especially on the heels of the Unemployment rate for September at 9.8%, which came out Friday. But you would have been wrong. You forgot the Fed, through it's ability to print paper faster than we can spend it, is funding this market rise at the cost of keeping the dollar low.

As I look at the chart of the Dow tonight, today's gain could be setting up a "W" pattern. If that comes to pass, if the 2nd bottom leg of the "W" pattern is lower than the first leg, it means the market most likely will head down and we will have our correction. If the second leg of the "W" pattern is above the 1st leg, we are headed higher and rallying over the 10,000 level. As you know if you have been reading here, I believe we will get the long anticipated correction.

If you look at the charts I posted on the previous Blog post dated Oct. 2nd, you will see that we don't have a lot of room between where the top Blue line crosses 10,000 and the top red line 10,000 Resistance level. These lines are being pinched together so we are approaching a breakout sometime in the next 2 weeks. This would be on schedule from my earlier prediction in August. Today's volume was not convincing as it was less than the past 3 trading days and below the average volume. I will need convincing on strong volume.

So I will either be correct and we will have the correction or I will have egg on my face. Either way, it's not a long wait.