Short-term upside targets almost reached

The SPX, NDX, DOW and VIX have reached almost their weekly Bollinger points. So tomorrow after a better opening, we will see how strong this move really is, since today was a short covering day. There is a potential for some follow through though, since NDX could even test the weekly gap at 1440. On the other hand, the 50 week MA is about to make a make a negative cross of the weekly 200 week MA at 1328, which is a long-term negative and we are up to 13 times earnings now, which is not cheap. Finally, one more piece of bad news that I have talking about for a while – the bond bubble is in the phase before the burst. That is true for America and Europe but no surprise with $4 new trillion of money to be printed while economies (or the real value of money) are contracting. The talking heads and many “experts” use the deflation phrase a lot but asset implosion is not deflationary – just the opposite. Today’s bailout program is the kick off of hyperinflation but it will take a while to work through the system, since it will go through stages until it reaches the free market – but it will and that’s not good going forward.


~ by behindthematrix on October 13, 2008.

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