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If you're reading this, you're probably
like me in this respect: Watching the market try to make up its mind is fun,
the same way that watching a game is. The best part about this game is that
you don't have to wait until Sunday - it is always on, and there is no
shortage of pre- and post game analysis. True, it is always the same two
teams - the Bulls vs. Bears, but each day they go at it with a vengeance, and
recently the games have been nail biters! Furthermore (and perhaps the very
best part) is that there is absolutely nothing illegal about placing bets on
your favorite team for both fun and profit. In
fact, you're encouraged to do just that.
Today was a blowout
day for the Bulls. In spite of all the bad news over the last few weeks, the
Bulls and Bears have battled to a deadlock. On the Dow chart, that deadlock
appears as a trading range, with the upper bound at 12,750, and the lower
bound around 11,750. That is a pretty big field of play, but so far, neither
team has been able to push past the red zone and into the end zone. As I've
been cautioning over the past several weeks, it isn't prudent to pick sides
just yet - both the Bulls and the Bears are full of trick plays and surprises
(especially since the Bulls have help from the Fed). However, whichever team
can bust out of this range is likely to go on an extended winning streak. So watch the
range and prepare to act accordingly!
 
While I'm fundamentally bearish, I've
learned my lesson the hard way to stand aside and listen to the market. Which brings me back to my point. Even though it was a blowout for the Bulls today (Dow up 187), all the action
still took place within the confines of the range. This makes it hard to pick
sides just yet. Rest assured that any data you might use in your handicapping
- whether you got it from the Wall Street Journal or your own private
calculations - both the Bulls and the Bears have certainly already discounted
it and more. They've used every piece of information - both known and unknown
- to the best of their advantage.
So chalk it up for the Bulls today. They
won the battle fair and square, of course with a lot of help recently from
the Fed. You might think it is unfair that the Bulls have such a powerful
ally as the Fed on their side. But the Bears have a powerful ally of their
own - one even more powerful than the Fed. It is called Reality.
All this being said, it does look
promising for the Bulls. However, less than a week ago it looked equally
promising for the Bears. So just remember that looks can be deceiving. For
you to win at this game requires one thing and one thing only, and that is
being on the right team. Bulls or Bears, it doesn't matter as long as your
team is winning. The only thing that is certain about this game that you must
know how to submit to the market's will and to go with the flow.
Stay tuned and keep your eye on the
range. For updates, subscribe to my low volume, no spam email announce list.
Michael
A. Nystrom
Editor, Bull not Bull
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