October 8th, 2010
I wrote the following on September 24, on the eve of the last Full Moon:
“This is one time I don’t mind being on the losing end of a score. Since the market moved nicely for the past couple of weeks as it barrels ahead to the 1150-1164 hurdle, the Moon’s batting average dropped to 66.7% over the previous 12 months and 67.7% since I started keeping track.
With the way market momentum seems to be expanding (at 1146, it’s excitingly close the hurdle this morning), I’d be disappointed if the next phase to October 7 doesn’t stick to script and end above yesterday’s close of 1124.83.”
And here we are, on the eve of a New Moon with the Index just shy of the upper-end and right in the middle of the target range at 1158.06.
Pretty amazing. The Moon’s batting average is hanging in at 66.7% for the past 12 months, slightly less than the 68.8% since the count started in July, 2009.
This next phase is probably going to be good for the average but bad for those of us who are looking for a break above those key trendlines. We have several conflicting forces working against and for us:
- there are 11 trading days until the next phase, one more than the usual
- the index is at a critical resistance level
- the market is digesting the excellent September run
- we’re facing the curse of Black Monday, Black Friday, Black you-name-it
- the election campaign is entering the home stretch and anything is possible
- “Sell-in-May-and-go-away” is winding down which could be either good or bad
- The Hindenburg Omen hasn’t crashed yet!
- The “Death Cross” is on the verge of being rescinded
- The inverse head-and-shoulders which we’re now enjoying the benefit of (in the same post as the Hindenburg Omen) is due for a “buyers’ remorse congestion” back to the neckline.
My guess is that if you want a safe side wager, go with a correction to around 1130 by 10/23 before we resume the march higher. That’s the way I’m betting (but I hope I lose because there’s much more money riding on the other side of that bet).