My Home     About Me

0920 EST Thursday March 16 2006

Good Morning: Numerous multi-year highs and new all time records were set on Wall St yesterday as the S&P led the way by sneaking sharply higher this week and achieving those important breakouts over recent days of 1,290, 1,300 and 1,310 that we explained in detail a while back could foment an explosive upside move in what could be the beginning of some kind of major 3rd wave advance, citing what has really been what amounts to an exceedingly rare potential triple 1-2 in the S&P that has played itself out since December, while at the very same time it has been building a huge head of value at just under the 1,300 level, before dipping in classic fashion, to summon the energy it needed to take out the upper end of the range with a vengeance. This is in essence what happened over recent days and it has been very strong indeed in its authoritative move to new multi-year highs and has been led itself most notably by the Dow Jones Transportation Index which continues to soar to new all time record highs at near 4,600 and could now have its sights set on the 5,000 as the next level.

For almost a year now we have been pounding the table regarding the historical similarities to 100 years and 50 years ago and what huge upside moves back then lay ahead for the Dow Jones Industrials and other averages. Fact is from 1903 the market advanced nearly 1000% over the next 25 years and from the mid 50's it rose 50 fold over the next 45 years and it now looks more and more to us like Deja Vu all over again. Sure they can throw everything and the kitchen sink at these markets to try and derail advances, from the so called bubble to 9/11 and now Nuclear proliferation fears and somehow the markets shrug off all these negatives and ultimately continues to move higher as it did for all of last Century. For the benefit of new readers, it has been our view for some time, that just as over the first half of the 20th Century, the market delivered a 10 times advance, the 2nd half was five times that amount or 50 fold, as the speed of Globalization began to increase and Capitalism or quasi-capitalism spread from under 50% to 95% for the World and today prosperity on an unprecedented scale is the next big thing that can in our view, drive markets higher at up to 3 times the pace of the last Century, in just the same way as China is has been growing at 3 times the rate of the US economy over the past 28 years straight. It's hard to see the future ahead of time, but experience has shown that it pays to be bullish and that buying dips as well as buying strength as we do every day, is the way to go.

Yesterday, our MODAR service delivered 75 specific recommendations intra-day and we were buying heavily into Nasdaq issues and larger cap stocks, including Sears Holdings SHLD, Ciena CIEN, Oracle ORCL to name but a few and bought an early 10 times position in PTSC.

Our bullish call on Silver and Gold righteously and justly has been manifested by a reluctance to pull back much driving Silver to new 25 year highs again yesterday again illustrating the tightness in this market and a foreboding that Gold and Silver continue to surprise by moving sharply higher unexpectedly and we can see a strengthening case that in the event Silver runs up through $11 and Gold re-challenges $570, Gold might be close to breaking up through the $600 level to as high as our upper range target this year of $750 and could likely settle in a new range later this year between $600 and $700, before breaking out in earnest in 2007 and heading up anew towards the $950 to $1,025 range with Silver to somewhere between $15 and $18 initially and later to upwards of $25 to $50 all over again.

As we suggested all week, the US Dollar has been increasingly breaking down from here and it fell quite sharply all day to break through the highly important psychological 90 barrier. A renewed breakdown through 88 could renew the downtrend that could be a positive for all.

Trade Well
From the Desk of Savant

Basic Materials sector   Technical chart patterns   support/resistance levels   ETFs (exchange traded funds)   Deron Wagner   iShares Hong Kong (EWH)   S&P 500 chart pattern   emini's S&P 500   earnings   economic data   Biotech HOLDR (BBH)   Emini's Nas 100   Short selling ETFs   exchange traded funds   sector rotation   etfs   corn futures   selling options   commodities   mcio