A Chill Wind Down Wall St

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A Chill Wind Down Wall St

Posted on 09/25/2006 16:41:21 | Link | Post Comment

In spite of our optimistic disposition of late, our propensity to turn on a dime has been manifested before and regrettably, there may have been some early signs of pre-September jitters late Thursday, as a chill wind blew down Wall St and in spite of the OEX S&P 100 making new post 9/11 new highs, just as the Dow nearly did the same back in May, does not necessarily mean the market can continue its impressive August performance and it would not be the first time that traders had returned after Labor Day and sold the market down into the fall. And while most strong monthly closes have a tendency to continue higher into the following month, there is no guarantee this will occur and so a certain amount of caution is warranted, just as we exercised with MODAR Thursday, mostly taking profits and only initiating a few light new positions. There is always the possibility the markets could be setting up for a classic bull trap in the making.

So how the markets behave going into week''s end could give us a big clue as to how things might unfold next week, but suffice to say there was a definite air of tiredness Thursday and we noticed a lack of good buying opportunities contrasting a richer offering of short sale ideas...

Meanwhile Gold and Silver performed extremely well all week and do appear poised for a strong continuation into September. We did see the December Silver contract, now the current month trade above $13, as we suggested it likely would, and we can expect some backing and filling before deciding its next direction. It would appear that any decent traction above $13, should inspire a stronger upside movement.

Trade Well

From the Desk of Savant