You missed the news.
That's OK, I posted not one but two news reviews to our Twitter account, so you can get an idea of what goes on in our Live Member Chat Room during market hours (and before and after). This morning there was so much to talk about we had to make two posts with big news from China and an examination of the Oil Market (contracts roll over tomorrow), Corporate Profits, a Chart Review and even some election news – it's all there for you on Twitter (6:30 am) – I'm not repeating myself.
As you can see from the above chart, a month of Central Bank actions (12 of them) has bought our beloved S&P up from 1,850 all the way to 2,040, which is 190 points and just over the 10% line of 2,035, which is where we predicted we'd be on our Big Chart (see dozens of other posts). As noted this morning, we expect to be rejected at 2,040 (/ES Futures), which lines up with 17,550 on the Dow (/YM Futures), 4,415 on the Nasdaq (/NQ Futures) and 1,100 on the Russell (/TF Futures) – so those are our shorting lines with very tight stops above – in case we're wrong and the rally has more legs.
There's not much data this week but we do have the Chicago Fed this morning, PMI and the Richmond Fed tomorrow, Durable Goods on Thursday along with Consumer Comfort and then the 3rd adjustment to GDP on Friday along with an 8:30 peak at Corporate Profits which, by all accounts are shrinking rapidly!
Are 12 rounds of stimulus/easing enough to ignore the 2.5% drop in earnings expectations in a $100Tn Global equity market? Well, it wasn't $2.5Tn worth of stimulus so, no, it's not… See, investing isn't hard – it's just math! We do math all the time when we are evaluating companies so why not do it when we evaluate indexes as well?
We did the math on the Dow back on Jan 14th, when the Dow was at 16,159 and we valued each component and that led us…