Edited by entropy, 04 December 2007 - 12:20 AM.
Explosive down pattern continues
Posted 04 December 2007 - 12:13 AM
Posted 04 December 2007 - 03:48 PM
Thanks for the charts goflow. Yeah.. it makes total sense that falling rates are bearish, since rates are falling to stimulate the economy i.e. falling kitchin cycle, and the market tends to anticipate recessions by about 6 months.
What maybe short term bullish, are the initial rates cuts, as we saw this time, but the effect doesn't seem to last. But the length of decline is vary variable from very short, to very long like 2000-2002. which saw 50% cut in market, 90% drop in Nasdaq, so called 'pushing on a string', but of course eventually the rates took effect, mainly by inducing another credit based boom. So the challenge is that at some point the rates cuts will stimulate the economy, and the market will also anticipate that by going up.
Very much what I have explained to myself why there seems to be quite a lag time for the effect to emerge. The more liquidity good for economy and stock market is obvious, just that 'by the time' market reacts, it's the time to raise rate again to fight overheating. Yes, with this correct thinking, market reacts also VST favorably.
Pure price work needs no indicators. Line/ Pattern posted is my trade. Between my English grammar and my TA, only one of them allowed wrong! -- 愛樂利威
Investing.com chart time in PST; Worden chart time in EST
Swing Those Lines
Posted 20 December 2007 - 12:06 AM
Short version is as follows -
- I am even more confident now of my November 1st bear market call ( see first entry of this thread) and the pattern behind it, things are shaping up here for the confirmation, my work says that will come likely mid Janaury'ish.
- Technicals and sentiment never supported a intermediate low - I gave that near zero odds and it wasn't - as now many sectors are back testing they're lows. ...and they still dont' support one.
So the consensus is we rally over xmas period ( see trader polls of any kind!) , but there is a very strong fractal signature in the market, and if it continuous i've shown the next step below i.e. for tomorrow, topping below spx 1475 ( or at today close) and heading down to test August lows in purging plunge of 80-100pts! - unlikely but the pattern is very strong so I wanted to show it. We would then see the 'xmas rally' for a few weeks into new year, back to 1470 'ish.....then the 'real' down move would occur, to 1300 and below in January.
More to he point, technicals and sentiment agree with this down price pattern, so even if the fractal ends here, my work says the best the bulls will get is weak sidseway chop perhaps to spx 1500 area over xmas - there is very little 'bullish' to see that I can find now.
Edited by entropy, 20 December 2007 - 12:13 AM.
Posted 17 January 2008 - 11:53 AM
Edited by entropy, 17 January 2008 - 12:00 PM.
Posted 21 January 2008 - 02:44 PM