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[maineman]

Just sharing some thoughts. Cumulative breadth is strong. Has been trending up since mid/late August. Less than 2 months. "Usually" a breadth move lasts 3 months-ish. The key averages are safely above the 10 and 55 day exponential moving averages. All the usual technical indicators are positive. Some of them are "overbought" or near their upper boundaries. In a "trading market" that could be cause for concern; i.e. sell when overbought and buy when oversold. But... this may be a trending market. If so, overbought/oversold indicators are less reliable. (look at the Ultimate Oscillator on August 17th after the upthrust. It hit "70" - an overbought reading. The SPX just took 5 or so days to catch its breath and surged another 40 points...) Look at the MACD histogram. It's been heading steadily downhill since that day, as the market surged higher. Or the RSI, which keeps trotting along just below its "70" line... And then there's the big consolidation/box I've been talking about. We have popped above it. To review, the move once a trading range/consolidation/box is breached usually leads to a move equal to the width of the consolidation. Currently that's about 150-ish SPX points, so a move to 1650 to 1700 is entirely possible. So...what's going to happen? Well, I wish I were smarter.... IF the market holds up here, catching its breath like it did in August, it is entirely possible we rocket higher. But it feels like it needs to do it soon.... One scenario I'm keeping an eye out for is an unexpected swoon that makes it look like the rally is done for, that stalls out again above the 55 day exp MA, and reverses higher. This would be an exceptional trading opportunity, should it occur. For now, personally, I'm mostly day trading, as the risk has risen. The upside momentum is still there, so intraday dips to support continue to make good trades... Keep an eye on 1) the 10 day exp ma 2)MACD histogram (daily) if this drops below zero, bulls should get a little nervous 3)RSI 14 needs to stay above 50..... On a bigger picture note... whatever rocket to the moon we may get will be an excellent opportunity to start locking in longer term profits. This bull is getting long in the tooth. I'm not so sure 2008 is going to be such a good year.... just my idle late night thoughts. Getting too old and lazy to post charts... mm

[ogm]

Agree, next year will probably be difficult with elections coming up. There will be plenty of concerns and speculation about specific sectors for political reasons one way or another. It is quite possible that we are repeating pattern from previous elections. Strong rally, followed by several month of up/down fluctuation. Market has topped in February 04 back then and weakened into October. Markets fluctuate

Edited by ogm, 10 October 2007 - 10:36 PM.