With some key averages reaching record highs on Friday, the Dow Industrials have now come within 530 points of the 13045 target first broached here several months ago. I was incredulous then and remain so, but what’s a chartist to do when the technical indicators points unambiguously higher?  For my part, I’ve simply stuck with a few mechanical indicators that have never failed me, holding my nose and averting my eyes as shares make ready to dive from an increasingly spectacular height. All the while, Wall Street has remained oblivious to the deflationary bust that is sucking irresistible power from the housing sector. But so what? As long as economic collapse is not upon us, why not just keep partying?

A devil-may-care attitude was rampant in San Francisco over the weekend. I was there on business but couldn’t resist venturing into the Union Square area on Saturday. I lived in the city for more than two decades but never in all those years witnessed anything like the throng that packed the sidewalks from Market Street to Chinatown. Ironically, Chinatown itself was relatively quiet, presumably because the gift-buying hoards were more interested in the really expensive stuff -- Tourneau, Tiffany, Neiman Marcus, Hermes – than in Grant Avenue bric-a-brac

A few weeks ago, the Street-savvy Art Cashin noted wryly that the current bull market may be the first to have been inspired by the prospect of an economic “soft landing”. But it is now clear that other factors have been at work, most significantly the ongoing, lucrative success of our largest financial institutions. The big banks continue to rake it in, and as long as the Fed talks tight but acts loose, they have little to fear. They are licensed to print money, and that is the business of this era. In the meantime, Ford Motor Co. may be about to furlough half of its U.S. labor force, but what do Dearborn’s problems have to do with holiday shopping in San Francisco? Nothing, evidently. Or so it would seem.

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London Seminar

I’ve had some requests to give a Hidden Pivot seminar in London, but not quite enough yet to make the trip worthwhile. If you’d be interested in attending a two-day class there, probably sometime in the spring of 2007, please let me know via e-mail, including your contact information.