Beginning a bottom

Got the possible start of a complex bottom on the NYMO this week with the NYSI slide from 3/7 and the NYMO plunge into 3/16 (where finally there was a lot of oversold).

So what now, going forward? Looking for the same old same old -- first a bounce on the NYMO from deeply oversold, followed by another decline (one, two days, three would be great), to set in place a low above a low on the NYMO (would also be great if that was a price divergence too), which would an aggressive trader's buy signal for the next advance; and finally an upturn in the NYSI to confirm the market rally. As Trader Vic Sperandeo might say "as simple as 1-2-3". (How many times have I posted this on Swing Waves and here?).

I've added blue circles to to my master chart to illustrate what point we are at in the cycle and what's likely going to happen next (likely, I said, not always).

Got part one -- the bounce on the NYMO from deeply oversold (see the current blue circle). Don't have parts two or three yet so for now the bears still have the chance to keep this drop dropping.

How's it going to play out in the next week or two?

If the bears remain strong they will rip this market apart next week as they did back in August of last year (see the August circle). That would actually be fine because they'd get to make a bit more money and we'd likely have even a sharper rally afterward (see the aftermath of the August circle). If the bears are close to done right now, this turn will likely resemble the turn in November (see the November circle and its aftermath).

As they say, history repeats, rhymes...whatever...but it's going to do it again. When it comes to fear, greed and time -- i.e., the madness of crowds -- there is nothing new under the under the sun.

Have a good weekend.

http://stockcharts.c...1656&r=3707.png

Good post, diogenes. I agree with you for the most part. This correction definitely looks to me like it will be bigger than Nov., although I'm not ruling it out entirely. I think the final low will come in between 1205 and 1230 on SPX. That's where I'd be looking for a positively diverging bottom in internals such as NYMO.

At this point, until I see otherwise, I'm going to assume the internal lows are in-and that you are right in seeing the start of a complex bottom. Now, price is another story, as you know. But I like how you are looking at it, because it resembles my thinking Bears have a choice of two ways to finish-hard and sharp (my preference) or a choppy as heck month or so(boo). I'll be glad to trade it either way, Mondays breadth will be the GPS for what course we are on, imho.

Got the possible start of a complex bottom on the NYMO this week with the NYSI slide from 3/7 and the NYMO plunge into 3/16 (where finally there was a lot of oversold).

So what now, going forward? Looking for the same old same old -- first a bounce on the NYMO from deeply oversold, followed by another decline (one, two days, three would be great), to set in place a low above a low on the NYMO (would also be great if that was a price divergence too), which would an aggressive trader's buy signal for the next advance; and finally an upturn in the NYSI to confirm the market rally. As Trader Vic Sperandeo might say "as simple as 1-2-3". (How many times have I posted this on Swing Waves and here?).

I've added blue circles to to my master chart to illustrate what point we are at in the cycle and what's likely going to happen next (likely, I said, not always).

Got part one -- the bounce on the NYMO from deeply oversold (see the current blue circle). Don't have parts two or three yet so for now the bears still have the chance to keep this drop dropping.

How's it going to play out in the next week or two?

If the bears remain strong they will rip this market apart next week as they did back in August of last year (see the August circle). That would actually be fine because they'd get to make a bit more money and we'd likely have even a sharper rally afterward (see the aftermath of the August circle). If the bears are close to done right now, this turn will likely resemble the turn in November (see the November circle and its aftermath).

As they say, history repeats, rhymes...whatever...but it's going to do it again. When it comes to fear, greed and time -- i.e., the madness of crowds -- there is nothing new under the under the sun.

Have a good weekend.

http://stockcharts.c...1656&r=3707.png

+1 Good analysis.