Tiresome as yesterday's price action may have seemed, it nonetheless generated robustly bullish signals for stocks and gold. Both vehicles marginally exceeded bullish price triggers that had been flagged in Wednesday's Touts section. With respect to the Dow Industrials, we now expect a 500-point rally, presumably extending into early 2008. This is commensurate with a target in the E-Mini S&Ps that lies well above Wednesday's settlement price. We can't believe it either, and that's why we plan to monitor the hourly chart closely for signs of a bearish turn. The Hidden Pivot rally target became a 'go' when the E-Mini exceeded the target's sibling midpoint at 1506.50 by two points. That's not much, and we acknowledged at the time that predicting a major rally on such evidence was highly speculative, akin to projecting the winner of a Presidential election based on results from West Virginia and New Hampshire. Even so, the pattern that produced the target is so clear that even a slight penetration of its midpoint must be regarded as unmistakably bullish. This is not withstanding the fact the Dow seemed to struggle to close just a smidgen higher yesterday, and that evidence is mounting daily that the weakness in the housing-sector could easily turn into a freefall. Housing Decline Accelerating Indeed, the New York Time reported yesterday that home prices across the U.S. had fallen for the tenth consecutive month. Not only that, 'The one disconcerting thing about the number is the rate that prices are falling is accelerating,' said Patrick Newport, an economist at Global Insight, a research firm outside Boston. We linked the story, along with some other, equally sobering items, in the Intraday Notes section. There is no question in our mind that real estate, as well as the U.S. economy, is headed toward deep,
LATEST TRADES
