With recession coming on full-bore, bank failures starting to snowball, and no end in sight for falling home prices, why does Rick's Picks expect the Dow Industrials to be trading somewhat higher come November? For starters, you have to realize that Wall Street and the stock market exist in a warp totally apart from perceived reality. If any proof of this were needed, try tuning to CNBC, where guests who deny we're even in a recession are treated respectfully. But even more persuasive evidence that the Dow is in no hurry to plummet from a current 11300, and that it may in fact be about to turn moderately buoyant into year's end, can be found in the chart below. (Click on chart to enlarge) Notice how the most recent decline failed to exceed two small lows near 10700 that were recorded two summers ago. The lows comprise what we refer to as 'look-to-the-left' supports, and although they may not look like much in visual terms, they are quite significant from a Hidden Pivot perspective, since they contained the steep selloff from mid-May's high. In our view, if papa bear were about to go on another rampage, he would have signaled it by breaching the look-to-the-left lows before the selling climaxed. Instead, sellers have retreated from just above the 2006 lows by way of a weak bounce, and it looks like it could mutate into a bullish drift in the months ahead, lifting the Dow to as high as 12000. Oil's Plunge Bullish This scenario meshes with our forecast of a collapse in the price of crude to below $70 a barrel. Lower oil prices would be a plus for the U.S. economy as a whole, and even though the respite would only be a death rattle for output and consumption, it would
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