Financial history doesn't repeat itself, but it often rhymes. You can't be stupid enough to trade off anything I say.... I'm lucky they let me out of the straight-jacket long enough to trade.

J. P. Morgan

"Sell down to your sleeping point"

Friday, July 18, 2008

Sector Rotation

Weeks ago, I noticed that it looked to me like noncyclicals(safety play/ early recession) were looking good, but that Utilities looked toppy. I asked myslelf.... Utilities out perform in the middle of the recession.... That means we are Past the middle.
As a shear statistic.... if at 9 months the recession is Greater than half way over. But with non performng financials we were Less than 2/3 the way through..
R= Recession.

9 months = greater than .5 R
9 months = Less than .75 R

9=.5*r
R<18

9=.75 R

R >12

Recession =12-18 months.

If Recession =18 months,
Banks bottom B=.75*18
b=13.5
Banks bottom mid november.

Banks will bottom from now to november15

some say the first half of the lows, are half the legnth of the recession... which means a 30% total decline. That is 9700. I also have fib 10400 and 10,000

Trend line resistance in about 3 months lines up with 10400. but the fib looks good at 9700

12000 is the 50% retracement...

I'm to0 tired to follow my math.... Basicly the market bottoms ends between october and mid nov between 10400-9700????

The dow 6k crowd is going to be Pissed.

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