For Once I Agree With Cramer

This afternoon Jim Cramer made the statement that the market action next week will likely dictate the outcome for the rest of the year, and I agree with him. It looks as though the major indexes need one more new low to complete an impulse wave down from the 11/16 & 11/17 highs. If the typically bullish period from the day before Thanksgiving to 12/1 does not exceed those highs, then the correction will remain in force, and we will likely see lower lows in December. If however, those highs are exceeded, then markets may begin to accelerate into the new year and on into the summer.

So far, I see little evidence to convince me that the correction will not pick up speed after next week, if not during it, as my weekly breadth indicator turned negative again this week after being mixed in the prior week. It is rare that the markets will not follow-through for at least a week after a new signal, and this one was also accompanied by a negative divergence.

My hunch is that after a rally attempt next week, we will see a March 07 type swoon that will shake out the bulls to set up the next leg of the rally. We will have to wait and see how the market behaves after that selloff to determine if that will be the extent of the correction or whether there will be one more leg lower.

Both the dollar and gold were up today. It is beginning to look like the trend in gold has decoupled from the dollar. Oil continues to hold up and as long as it remains above 68.32, the trend is up. However, it would be better for the bullish case if it remains above the 73 to 75 level.

Barring any unexpected market action next week, I will be taking a break from posting until November 30. We were able to sell the last of the townhomes that we had on the market since 2008 as well as complete a renovation at a shopping center this week, and I need a break.

Happy Thanksgiving!