No replies to this topic

[kwest]

The Basis:
- trend is down from Aug 11 high, to retest Jul 15 low
- both bulls and bears seem to be loading up for big directional moves ('major bottom', 'deadcat bounce'...)
- vix -- and traffic in the Hamptons -- is saying that these big moves aren't likely vst
- maximizing pain is the presumed role of market

Market's plan:
- create pain by numerous 3 day swings causing the bulls/bears to reload/unload
- trend down to testpoint without scaring off the bulls. Like boiling frogs.
- use the ever popular Head and Shoulders and Mirror Patterns that pervade charts everywhere
- let Far Out of the Money options whither and decay

[If we breakthrough the Aug 11-Jul 15 bottom trendline on Monday, then this plan is null and void.]

Just an idea, of course.

http://stockcharts.com/c-sc/sc?s=$SPX&p=60&st=2008-06-23&en=2008-09-15&i=p26425616426&a=103921194&r=1090.png