Don't get me wrong. I still believe this is a bear market rally. I don't try to forecast or predict what the market will do, or when it will do it. I simply listen to the market and interpret what it has to say, and then I formulate scenarios to deal with whichever direction the market decides to take. Sometime my interpretation could be completely incorrect. And I will be the first one to tell you that have happen more often than not. I have said it before, it is not about being right in calling the market, it is about being on the right side of the trade to make money. So here is what I'm seeing as a possibility. DJI to be above 10000, the SP500 in the 1150 range, and the Nasdaq 100 near 1600. "WHAT! Are you crazy?" You might think I got chopped by the market so badly that I start seeing things. No, the last couple of months I have been quite profitable...thank you very much. And no, I'm not crazy. Read on...
If the bull flag on the weekly chart for the DJI and the SP500 developed and played itself out, then the measured move put the DJI above 10000 and the SP500 at 1150. And the measured move from the double bottom on the Nasdaq 100 will put this index near the 1600 level if this rally is to be continued.
Is it possible for a bear market rally to make this kind of move? What is the reason for such a move to be possible? The reason for these indexes to reach these unthinkable levels (at the present time) will be the same reason for crude oil to reach $65 a barrel today. I don't need to tell you the answer, you know the answer. Go read what I said about crude oil prices from this post I wrote back in mid April of this year. Was the projected price I saw far fetch now? Who would have thought it could have reached $65 a barrel today.
