We Are Not Far Away from the Intermediate-Term Bottom

My fearless forecast: Time-wise, it appears we are quite close to the intermediate bottom. I think we should see it within the next two weeks (highly likely). There's a good chance it will happen between tomorrow and next Friday, in fact. It's hard for me to give an estimate of where the Dow and S&P will be trading when it happens but I would say an educated guess would be 4-10% lower than the current prices. That gives ranges of about 6500-7000 on the Dow and 675-720 on the S&P. These levels may actually only be hit on an intraday-basis. It depends. If you recall, on Nov. 20th the low was 741 on the S&P but it closed at 800 on the day. Right now, the situation is very similar to in the area of November 10th-15th. Remember, the market had an intermediate-term bottom on Nov. 20th. Keep in mind that this is the sixth month in a row the Dow is closing down, which is very rare in history. That, combined with the intermediate-term bottom I'm anticipating, long-term cycles possibly bottoming or around this area... could setup a very big and perhaps quite long bear market rally - and what may become a very positive month of March. I personally will be thinking hard about buying SPY calls once I'm certain the intermediate-term bottom is in or much closer to being in. Normally, I would be much more cautious of going long because, as you know, between November and January, the market really didn't go up much (all things considered, including risk), so an intermediate-term bottom doesn't necessarily mean you should automatically go long (when you're in a bear market). The risk/reward needs to be there and make sense. I'm seeing some signals which make me feel like buying call options will likely be a good idea on SPY once the intermediate-term bottom is in this time - and one of those is the Dow closing negative for the sixth month in a row (that wasn't the case in November).

Edited by alysomji, 26 February 2009 - 11:09 PM.

The history of this board is.....Whenever the word bottom is in the title.....There will not be a bottom......Same with top calling.....We are in a oversold bear market, you are right, oversold is not a buy. It is not a bottom either....

The history of this board is.....Whenever the word bottom is in the title.....There will not be a bottom......Same with top calling.....

True

Board history or no, we are just one strong up day away from the onset of an IT uptrend, as explained in a string below. That's what my work says anyhow. Best, D

Opinions, like TA, are like a-holes. Everyone's got one. The market only has 2 directions, up or down. Makes it that much easier. How is it that so many can play the game yet consistently lose so much yet insist they can continually predict the next move? What force of nature drives man to such actions? Ego? I have no idea.

If they are still around it would seem that they have their stops in place and must practice good money management rules. Market goes up and down almost daily with moves large enough to make money both directions. Hard to know if someone lost big unless he post it.

My fearless forecast:

Time-wise, it appears we are quite close to the intermediate bottom. I think we should see it within the next two weeks (highly likely). There's a good chance it will happen between tomorrow and next Friday, in fact.

That is exactly what I expect. It may be an intermediate term bottom or THE bottom, depending on the price.