Is Dow 12000 a multi-decade top? Signs of short covering shows the starting bear market after election can be devastating
Sam Adelton
Oct. 20, 2006

Every day more bears are getting converted to bulls as they cover their short positions. Dow keeps inching forward but there are fewer bears left to fuel the market. The extra liquidity that left the oil, gold, silver and copper pits have come to the equities shelter but something interesting is happening behind the scenes.

The smart money index shows that the early birds who really make the money before any move is actually positioning them for the long term bear market. The bear market in stock can be devastating. But bear markets take time before becoming vicious.

The fundamentals are clearly negative. The economy is booming under the stigma of stagflation. Fed is concerned about inflation. The economy in short run is creating the excesses especially in manufacturing. The Fed can raise rates three times in 2007.

When everything is analyzed together, DOW’s path pf least resistance is downwards and it will test the low of 7177 in 2007-2008.

Is Dow 12000 a multi-decade top? Signs of short covering shows the starting bear market after election can be devastating
Sam Adelton
When everything is analyzed together, DOW’s path pf least resistance is downwards and it will test the low of 7177 in 2007-2008.
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Like the NY Empire State Index, the Philadelphia Fed survey data manifests the robust growth of US economy
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Market expected NY Empire State Index to come at 13.0 from prior month’s 13.8. It came out on Monday at 22.9 surprising every one. Tomorrow around 12 Noon Philadelphia Fed survey data is set to surprise all. It will be equally robust.
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New orders, jobless claims, money supply, average workweek, and stock prices – all point to a surprisingly robust US economy...
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Initial Claims - the number of people receiving state benefits and the insured unemployment rate both show a stagnating state of underemployment.
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