So...... When in doubt, Run some charts.
Chart-Astrology/Idiot Wave Theory
Ringing in my Ears this week, has been This Comment "The market never moves as low as the Technicians talk about.".
I know I don't believe in it..... and I usually get burned on my wave counts in the last 2. But by my EWT wave counts. Which are in the chart above, and were a NIGHTMARE count, because of the lack of bounce. ... Based purely on the Wave counts. We have a bounce to the 11400-11500 level(even 11700 wouldn't surprise me, as a Dead Cat bounce at this point). Also 3 days of some sideways action and a move to 11300 would fit this model.
My forecasting of the last 2 waves is almost always Severely Flawed.
Downside Target, 10300-10800. and Many Technicians are looking at the 10700 level.
The big Chart
I've seen some Bear Frustration lately... and I just figured out why. I'm not saying I "Believe in Symmetries", but there are way to many of them to be ignored.November '06 - March 07- 6 months it took us on the upside. It has taken us 6 months to get through that Minor amount of resistance.
11K, It took us over a year and 6 attempts on the upside to get through 11K. Not withstanding a sudden move to 10,700, It should take 3-6 months minimum to get convincingly through that level, Further more. It absolutely seems Positively Silly to think that we won't retest 12K to the upside in that time. And Hubris to think that we would go through 11k so quickly.
I was doing some Reading, The Bears are Frothing. Absolutely Manic right now. I can absolutely see why there is so much resistance right now, and why there isn't any Panic. This resistance is Epic.
Furthermore, 11600. There is 2.5 years of Resistance/support at that level. The idea that we will go through that in a day.
If you want a Thesis for a lack of fear at this level, without Citybank closing it's door on Monday, I'm doubting we will see 11600. In fact this makes me nervous, that the sell off is done. and the kickback could be Violent.(but I could ad that to my long list of incorrect Thesis.)
Based on Recent History, on Fanny Freddy Monday. If we Repeat that history, The Government will come out with pacifier on Monday, we should sell off. And get that reflex rally.
But there is my old "Mantra" Something that works Twice, fails that 3rd time. But with August, jan, March.... This sort of makes it the 4th time... and don't forget the Anomaly of November.
Story in the Journal yesterday "LEARN TO LOVE THE BEAR." and repeats the mantra, about how the best time to invest is Bear markets. If that isn't "Buy the Dip" I don't know what is.
5 comments:
Assuming 0 growth, and average 12.5 P/E for stocks, according to my calc's DJIA must go to 10,400 or so (I'm including dividends in the calculations, and assuming they'll remain static).
This was as of 2 weeks ago. After earnings announcements I'll revise.
So EWT or P/E we're seeing approximately the same number.
Hi,
too much work, not enough play. I have to quit soon.
Fundamentals wow!.
I agree with you. We are seeing a lot of people doing research on the banks. And not as shorts.
Funny, You're forecasting is so much longer term than mine is, I'm just trying to figure out what is going to happen this week and maybe next.
Just as a game...
Assume the Monday sell off.
we sell off -400 to 10,700.
Double bottom Tested 06. Traders will Key off of that level. Also the Decending Triangle, inverted cup and handle has a target of 10,800.
Reflex Rally,
61.8% -11650
50%-12000
this fills the notion I have that we need to back and fill a little.
The SocGen, Low reflex rally was 8 days, the Bearstearns was 4 days. We are much more oversold now than at the Bearstearns. My mojo yesterday was saying 5 days of a reflex rally.
Another problem I have is that the Regionals are right after the big banks this week. Maybe the Reflex Rally will be as short as 3 days. then we come back down to 11K to wait for the Regionals. Rebound 3-5 days to 11700.
Then a sort of Dying quail, dome top as the "Tech is going to save us mantra from loses steam, maybe melt down for 2 weeks, playing with 11k...
drop down to 10900 We hear (30% the bear is over) Rebound to 11200. Then we freefall to 10200 in october. Rebound november to 10500.
Then absolute discouragement to 9500. then we spend 3 months working back to 11K.
I humbly disagree, that we need a 40 vix I think we could bounce on a Vix as small as 32.
The small research I've done says we should be getting 40's, but.. it keeps not happening. Maybe it had to do with Dot com Crash and 9/11 last time. People are a little immune... and some of the options guys are talking about the Vix "jumping the shark", and it's going to defy us at one point.
fanny freddy just got the discount window.
Futures are +80
Dollar isn't as grim. but still toying with that 1.60 level.
The dollar has to crater on this news.
I should have bought more gold. Damn.
Dow 9500 by November... unless gold hits $1200, which is a distinct possibility.
I'm taking any bounce in regionals to get out.
Hey tony!
You should probably take this exit. Assuming we do rally... Which I'm still suspect of. Cause we ain't bottomed yet.
Tony, You believe the gold story.
Check out invivoanalytics.com
http://invivoanalytics.com/2008/07/11/trading-ideas-for-monday-17/
Almost all the Long Calls are for Gold mining, All the charts look good. I can't argue that gold looks bullish, and at a minimum could retest the old highs.
They have a very aggressive swing trading strategy, most the research is done for you. Stops the whole bit. seems like it fits your style.
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