November 3rd Edition

Good Morning All,

There is little doubt that our predicted rocket launch toward 1200 on the S&P 500 has been somewhat delayed by the market's abandonment of the high ground that was taken some 10 trading sessions ago. Although the extreme volatility that has typified recent activity has made many investors quite nervous about future trends, it is our belief that the November correction we called for a few weeks ago...has simply come early. One of the major reasons for this late October swoon, and its carry-over into this week, may be attributed to the annual event that has influenced price action for many years. October is year-end for many fund managers, and it is their portfolio adjustments that have led to the triple digit up-and-down moves which have made markets so raucus of late.

We are not so sure that we want to call for a turnaround Tuesday this morning, but we will venture to state that the up trend remains intact, and that the flight toward 1200 S&P and beyond will resume by mid month at the latest. If David Nichols of Fractal Markets is correct, we should see this bullish resumption last through early March, whereupon a seasonal pullback may present itself... from much higher numbers. In short, this week's market has created yet another opportunity for those who have missed the enormous March/October gains, to get on board for the next four months, or five years if they are patient.

Commentary

Some of you may have seen the documentary "Life After People" which premiered on the History channel in January 2008 and has recently replayed. The film explores the idea of what would happen to the Earth, its environment and its structures,for months, years and centuries after people are gone. Interesting as the theme may be, I was struck by the parallel that might be drawn to the present situation in the Middle East . What would happen if all the foreign occupiers were withdrawn? Or worse still, what will happen if they are not?

In essence, people and politics do make a difference; but in the vast realm of time, it is both brief and fleeting by nature, and often, very destructive.

"And everybody praised the Duke,
Who this great fight did win.
But what good came of it at last?
Quoth little Peterkin.
'Why that I cannot tell,' said he,'
But 'twas a famous victory.'

Robert Southey

Bill Copp
Montreal , Canada
November 3 2009
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