The critical 1955 (I should say, critical to the turnips, I know others do not consider that level particularly important, just as 1842 had no particular importance in those models), was set long before the Saddam capture, I think that the market was already at a fork here (I discussed this last week) from a technical point of view, ready to go either way. The events in Iraq may simply tilt the weight to the other side. This change the scenario by barely two weeks, another decline under 1900 was not a necessary condition, just a high probability. I think that tomorrow, enough upward momentum will develop to start the year end rally ahead of time. Of course, if we start and get equity P/C ratio under .4 (and other extremes), that will be an extreme which will force, once more a much more conservative posture. Right now, I am assuming that tomorrow will resolve the question (close above 1955 before the end of Monday, as suggested here numerous times last week and earlier today) for the short term direction. Mind you, the plan has not changed much, a slight increase of the target and because of the news, a possible advance in the schedule. I am sure that even the best TA method that could theoretically be devised cannot take into account momentous events that cause local dislocations, and sometimes even acceleration of existing patterns.
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