Caution

SP futures are over 1100 this morning so SPX should open above there as well. Gold is bumping its nose on 1200. We are still filling a gap, but extended trading in this zone is bullish. I have posted some charts that show signs that we still could see the year end rally. The AD line did not confirm the recent sell off, and the volume line has crossed back above zero and its longer moving average. The small caps could be forming a base here, off which they could try for new highs. Like I said, we are still just filling gaps so far, but I would feel a whole lot better if this open is sold. If its not, I will have to seriously consider getting smaller.

I remember back in the summer of 2007, we were dealt some pretty serious blows in the credit markets. The stock markets sold off hard, but then rebounded to test or surpass old highs into October. Maybe Dubai is sort of like that. Its a blatant symptom of the credit bubble and what it left behind, and one would think that it would make people at least think about what is really out there, but equities may just decide to keep partying.