Subscribe in a reader"The conventional wisdom is buy on the rumor, sell on the news and the market did the opposite," said Benny Lorenzo of Kaufman Bros. earlier this morning. "It just kept going up and up, and I think it will keep going up because third-quarter earnings have been very, very good," he said, adding that the macroeconomic concerns might abate as the political environment for business becomes more friendly.
The move in equities today was a delayed reaction to the midterm elections & QE2. Itz has maintained that the rally would continue and perhaps sell off on the Non farms Payroll report tomorrow.
As indicated in the past weekends Itz Weekend Review, several index weekly charts were posted. Below is the S&P500 weekly chart. Again 1225/11250 has been the level Itz has been targeting near term. As you can see there is quite abit going on here, basically a larger Inverse Head & Shoulder pattern & completion followed by a retracement that formed a larger Cup & Handle. Then a Mini version in 2010 which should see the S&P hit 1245 & retrace to 1155.
With the election & QE2 out of the way the remaining moving event remains the extension of the Bush Tax Cuts. Itz suspects that this will be done prior to the new year. Some sort of tax deal will invlove merging both Dem & Repub tax cuts. So look for abit more upside followed by a few weeks of retracement (which is healthy) then a rally into the New Year.
On the energy front, Itz Pix holdings such as RIG, PDE, SU, WLT, PWE, PGH, VLO are ripping as oil has broken above $85. Itz suggested hedging using the Proshares Ultra Short Crude Oil etf (SCO) which closed today @ $11.36. Note the STOP is set @ $11
Now Itz Stock Chartz still see oil blasting off in the New Year, based on the silver to oil lag period of 4 months. near term oil could hit $90, with a raised support floor of $78. On the Radar is Proshares Ultra Crude (UCO).
Itz will go in depth in this weekend report
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