Some TA observations

For the first time since 2003, we are decisively trading below the mid-line of the bollinger band on the monthly charts. But the close is more important than penentration. End of the month we will have the answers. As for LT we are either making a monster bottom here or entering a bear market. Aug lows continue to be the line in the sand. From e-wave perspective, there are lot of problems calling Oct 07 as the top. I will post some thoughts during the weekend on that. As for the daily and weekly charts, we closed below the lower BB on both the charts today. Tommorow has very high odds of an up day based on this. NYSE MCO is sporting nice divergences with the Nov 26 lows. So we are due for some nice releif rally. It needs to be seen if the rally is sustainable or another bounce that will be sold into. Hard to answer that at this point. We'll see what develops.....

Edited by NAV, 08 January 2008 - 09:19 PM.

I"ll take "bounce that will be sold into" for $100 Alex....

Just to be clear i am flat here and daytrading. No setup for swing trades yet.

thanks for the info nav. looking fwd to the w/e to read ur update. personally i believe we will bottom this week at lvls between the march and august 07 spike lows. from there we will rally into yesterday's highs. the whole procedure might take us into the end of next week.

For the first time since 2003, we are decisively trading below the mid-line of the bollinger band on the monthly charts. But the close is more important than penentration. End of the month we will have the answers. As for LT we are either making a monster bottom here or entering a bear market. Aug lows continue to be the line in the sand.

From e-wave perspective, there are lot of problems calling Oct 07 as the top. I will post some thoughts during the weekend on that.

As for the daily and weekly charts, we closed below the lower BB on both the charts today. Tommorow has very high odds of an up day based on this. NYSE MCO is sporting nice divergences with the Nov 26 lows. So we are due for some nice releif rally. It needs to be seen if the rally is sustainable or another bounce that will be sold into. Hard to answer that at this point. We'll see what develops.....

Been using the BB since John introduced them in 1988 and I have observed several patterns that play out with them. On the 20 month BB the upper band has rolled over toward the average and price is below the average. When we see that price will approach the lower band, bounce back to the ma area and spend a lot of time sideways. When the bands complete the contraction toward the ma and turn sideways then the market is set up for the next big move. This is a topped market long term, the upper band will not be traded above and the next big move is down to 1170/1050 areas.

From an E-wave perspective there is no problem with the 1552 double top as I see it, been calling it a top since July 2007.

Best,
Larry