December Crude has taken its sweet old time falling to the Hidden Pivot target at 56.76 that we flagged here three weeks ago, but at yesterday’s lows the futures lay within just 11 cents of that predicted bottom.  Curiously, stocks seemed largely unmoved by the seemingly beneficent price action, which should have pleased everyone but OPEC. Now that unleaded gas looks poised to drop below $2, are we perhaps starting to take deflation in the oil patch for granted?

In any event, I am growing increasingly nervous about my own, preternaturally bullish, 13045 target for the Dow -- and not just because shares don’t seem to be getting much lift from what many observers would regard as good news. Consider the chart below, which shows unhealthy divergence between the Dow Industrial Average and its slow stochastic indicator.

(Click on chart to enlarge)

Granted, I’ve parsed only a few days’ worth of data to make this calculation. And, yes, stochastic indicators are notoriously misleading when they’ve been bobbing around in the extremely overbought or oversold zones for a while. But because my bullish forecast, which is based entirely on coldly mechanical indicators, goes against every mote of instinct in my body, I can’t help but to continually take the stock market’s temperature, and to bring as much skepticism as I can to each day in which shares have risen rather than fallen. It is of course impossible to predict precisely when the bear will finally pounce, but my very strong feeling is that it will occur with such stunning speed and ferocity as to surpass all imagination, even that of die-hard pessimists who have been piling up sandbags for weeks…months…years. We may not be able to turn the avalanched into opportunity, but it is my intention that it do us no harm.  

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Last Call, Australia!

There are still some seats left at the Hidden Pivot in Sydney on December 2-3, so please let me know ASAP if you’re interested in attending.  You can  request a registration form and further details by clicking here.