S&P 500 Could Go to 1340, I Don't Know When

(well, I guess I'm joining the pros who have said similar things...)

Laugh and be merry and forget about oil spill for a moment.

The US stock market continues to defy gravity for the most part, except for the days that Goldman Sachs gets attacked by the government agencies. Where is it going, you ask? Do you still care? Fundamentals? What fundamentals?

Oh I forgot. This blog is not about fundamentals (that's for my other blog). But even technically, this movement from February 8th low defies our sense of proportion. Take a look at this S&P 500 daily chart since February. You can almost count on the 1st trading day of the week to be an up-day. So far, 4 down days and 9 up days, and one of the down days hardly count (it was a doji). Today was no exception.


A sizable correction from mid January to early February turned out to be a one big bear trap. Or bull flag, however you want to call it. That was when Obama went bananas over the huge upset in Massachusetts Senatorial race and started threatening the financial industry with new regulations and new taxes.

This time, the market was destabilized by the SEC pursuing Goldman Sachs. But look, we see another bullish formation: a bull pennant! Oh how wonderful.

If I calculate the target based on the technical analysis, it will be the length of flag pole added to the pennant breakout. That will take S&P to 1340. I have no idea when.

Hahahaha, you laugh. I do too. But that's where the point and figure chart of S&P 500 weekly says it may go.

I'm not doing much trading these days, as almost all my funds are deployed in long positions. I sold some today to raise funds to play some potentially interesting moves (like OIH calls I got today, which went above my buy point, then suddenly crashed below my buy point, and ended the day at exactly where I bought at).The core has been in gold, silver, oil, base metals for quite sometime now (1 year). On the periphery, I have a few tech stocks and call options. One of them, OCLRD (after reverse split) sports 50% gain in 2 months. Not bad.

I have terrific bombs like GS calls, too, but overall, I stopped trying to make sense, other than my belief that big companies will continue to be backstopped by the taxpayers. Looking at whom Obama selected as the Federal Reserve governors, it looks like ZIRP (zero interest rate policy) will continue. Full-on attempt to reflate, even though I am not sure what's left to reflate.

Ooops I forgot. This blog is not about fundamentals... Just laugh and be merry. And before the government takes away your wealth through inflation that is sure to come (even the shorter-term Treasury bill rates have been creeping up), buy a real asset like our house by the beach...