Well, today's market action in the Stock index futures may just be the calm before the "Perfect Storm" that I've been harping on for the better part of 2 years. So, I just sent the following letter to my good friend Jon Nones, Deputy Editor at ResourceInvestor. I know Jon won't mind that I have included the entire text of my email here. If you haven't, for whatever reason, visited the ResourceInvestor website I highly recommend that you do. You'll find some very insightful articles on the entire spectrum of commodities that we trade. Tell them I sent you!
Dale F. Doelling
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Hi Jon,
I know you don't focus much on the Stock Index futures but I have literally traded the DOW futures contract from day one. I have been extremely bearish on stocks for what seems like an eternity and, believe it or not, I've managed to not lose money being short the DOW over the last couple of years mostly because I've been extremely nimble in my approach.
What I wanted to point out to you is what could possibly happen tomorrow if the Employment report shows any additional sign of weakness in the economy and the jobs market. As you are probably aware, the DOW cash closed at a new high on Monday but the DEC DOW futures failed to do so. The previous closing high was 14,165 on 7/19 and Monday's session closed at 14,157. What we are looking at is a possible MAJOR DOUBLE TOP in the DOW futures as the DEC contract was unable to provide confirmation to the new high in the cash DOW. If we get a lousy employment report tomorrow I would not be surprised to see a massive selloff in the 500-800 point range which would then open the markets up to a serious drubbing next week. I've been in this business a long time and that "Perfect Storm" that I've been talking about, ad nauseum, may be ready to make landfall.
Regards,
Dale F. Doelling
President and Chief Market Technician
Trends In Commodities
Trends In Commodities
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