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October 31, 2005

Close but no cigar, Mon., Oct. 31, 2005, 11:10 AM

Since the equity market in the U.S. has been turned into a carnival act anyway, I get to use the expression, Close but no cigar!"

You see, this weekend, I wrote in WIR and for ADVFN that a close on the S&P 500 index above 1210 would cause me to join a high-risk rally. I don't mind doing that of course, but let's say I think I'm a bit more nimble than most of my readers. By saying that, I'm saying that the huge majority of my readers are looking at the big picture and want my help in staying clear of problems.

If I join the rally, I have to tell you that, and I don't have the time to write a book to explain what to do to grab the last chair when the music stops.

So there we were on Friday with the S&P 500 index closing at 1198.41. I knew the Asia Pacific markets would jump on board Friday's rally, which then becomes a self-fulfilling prophecy kind of thing. Americans wake up this morning to see that the sun in Tokyo is rising (rapidly) and they clamor aboard the (gravy??) train.

So I figured I'd allow myself a 1-pct wriggle room to 1210.

And in the past hour the anticipated bump came through at 1208. Two points in 1200 is like a minor belch at the Cramer dinner table. But if 1208 can hold, I get to say, Close, but no cigar!"

And if I'm wrong, I can show you my (forecast??) take on this morning's gold market (yes, here and on the new ADVFN Gold Page). I called for a test of the $460 support rather than another test of the $480 resistance level. Short term.

Bingo. Gold is off -$7.00 a troy oz this morning, even though overnight it was down just 40 cents. So, yes, I get to call Bingo!"

This is, after all, a lot of fun.

But I'm not going to let these unknowing TH's take gold into the circus tent. We're talking real" money there. Hard money.

Don't ever forget that when you see your healthcare bill, or your property tax bill or your food and energy bills, or your credit card rates, all zooming north.

Something in this world has to remain solid. I'm glad it's gold.

And by the way, as I go to print, the S&P 500 has backed down from 1208 to 1206.45. Not much maybe, but enough to save my cigars.

Posted by Posted by Bill Cara on October 31, 2005 10:31:51 AM | Category: Cara Today in the Market

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