When is an ultimatum never an ultimatum?
Answer: When the ultimatum is delivered by a politician.
It now appears that the so-called "Super Committee" will not reach consensus and the President's ultimatum of enforcing the Draconian, automatic cuts to the military and welfare is all just so much smoke-and-mirrors-and-
Not only will there likely be no deal coming out of the Super Committee, there will also be no automatic cuts going into effect. And... by the way, did you know when those massive automatic cuts were legislated to go into effect? January of 2013. Is our Congress a joke or what?
Of course our political fiascos, as ridiculous as they are, do not hold a candle to what's going on in Europe. Maybe we should revise an old saying to, "Those who can, do, and those who can't, run for political office!"
What has this got to do with trading/investing in the market?
What this all means is this... It makes no difference what the Super Committee does or does not do. They are a complete waste of taxpayer time and money. As such, I am far more interested in what my charts, the forecasts and the global economies are doing than the current batch of miscreants taking up space in Washington.
Here is my current thinking...
- The forecasts are far more bullish than bearish in the near term. As such, I am exiting my short positions and moving into long positions.
- I like gold, but I think I will like it a lot better in about 3 weeks.
- All four of the major index forecasts are indicating a strong Santa Claus Rally. However, the Grinch who stole Christmas lives in Europe and his first cousin lives in the White House, so look for a potential exogenous event that could put a damper on the expected rally.
- Three out of the Four major index forecasts indicate the market will rebound from mid-November into mid-December, followed by a sell-off into late December, followed by a big-time rally into the beginning of the year. Only the Russell 2000 shows a bear-market bias into the end of the year. This means there is an elevated risk in getting overly bullish right now. Regardless, I plan to get about 40% invested this week. I will be issuing a trade or two for my CycleProphet Trades subscribers, as well.
The Elves are Rubbing Their Hands Together...
If you believe in Elves and if you believe that they have a clue about where the market is headed, and if you want to start going long the market... then now is your time. But... a word of warning... the Elves are convinced that they know the future and are never wrong... just occasionally early. This could be one of those times.
Investor Sentiment Forecast
The chief Elf says: "The Bull-to-Bear ratio is 2-to-1 in favor of the Bulls with a serious number of new long buy indicators. The market continues to be in an overbought condition, but appears to have bottomed in that regard. The red line (Short Sell) has bottomed and trending higher. This can be an indication of the broader market moving higher in the near term. The S&P 500 (green shaded area) is now trending higher. Higher risk plays on the long side are now in order."
DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer