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Momentum Says

Started by U.F.O. , Dec 28 2008 06:54 PM

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12 replies to this topic

#1 U.F.O.

U.F.O.

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Posted 28 December 2008 - 06:54 PM

Since 1985 we've had 5 major stock market corrections including the current one. 1987...1990...1998...2002...2008. All 5 have one thing in common...they put in momentum lows before they put in price lows, on two of these selloffs by as little as a day. All 5 of these charts are $SPX dailies.

U.F.O.

1987
Posted Image

1990

1998

2002

2008

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

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#2 AChartist

Tim

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Posted 28 December 2008 - 07:39 PM

You've done it before and I hope your right. They can do a shakeout without tech damage, a forward calculation on the RSI system can see a 5.5% down close before tech damage and they can push it 6-7% intraday and why wouldnt they with this volume if they want to accumulate. Bring it on.

"marxism-lennonism-communism always fails and never worked, because I know

some of them, and they don't work" M.Jordan

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#3 U.F.O.

U.F.O.

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Posted 28 December 2008 - 07:46 PM

I'm with you AC. The depth of this momentum low was exceeded only by the brutality of 1987, and then just by a hair. This makes what we've seen so far on 11/21 as "good" a bottom as anything we've seen in 21 years. My vote here is play this thing from the long side. U.F.O.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

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#4 nimblebear

Welcome to the Dark Side !

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Posted 28 December 2008 - 08:06 PM

you may be right. But how long will this bottom hold. we might have a mega rally, and then go back to a lower low sometime next year.

OTIS.

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#5 U.F.O.

U.F.O.

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Posted 28 December 2008 - 08:15 PM

nimble, I think it would take an absolute societal implosion to take us much lower from here. You're right however...it is possible. Someone starts lobbing nukes or this flood of cash in the system fails to gain any real traction...all bets are off. U.F.O.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

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#6 pdx5

I want return OF my money more than return ON my money

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Posted 28 December 2008 - 09:47 PM

nimble, I think it would take an absolute societal implosion to take us much lower from here. You're right however...it is possible. Someone starts lobbing nukes or this flood of cash in the system fails to gain any real traction...all bets are off.

U.F.O.

I completely agree. A much lower implosion in stocks & housing & jobs from here will be
followed by a societal upheaval the likes of which have not been witnessed in North America.

My FF prediction is we won't go lower than 700 SPX throughout the Obama admin.

As for some one lobbying nukes, fortunately the religion based extremists don't have
the power to destroy the industrialized world. Heck they are powerless even to stop
a tiny country of 6 million jews from hammering the Hamas regime at will.

Edited by pdx5, 28 December 2008 - 09:48 PM.

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

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#7 U.F.O.

U.F.O.

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Posted 28 December 2008 - 10:15 PM

Would it be political if we talk bad here about Hamas?

U.F.O.

"Democracy is two wolves and a lamb voting on what to have for lunch. Liberty is a well-armed lamb contesting the vote!"
~Benjamin Franklin~

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#8 pdx5

I want return OF my money more than return ON my money

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Posted 28 December 2008 - 10:27 PM

Would it be political if we talk bad here about Hamas?

U.F.O.

Yes! and that is why I have NO comment on hamas or Israel.
Just the facts maam :rolleyes:

"Money cannot consistently be made trading every day or every week during the year." ~ Jesse Livermore Trading Rule

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#9 Data

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Posted 28 December 2008 - 11:17 PM

that's because the formula for momentum only uses end of day values for the close. you're comparing the low intraday price of the daily bars with an indicator using closing prices. i have some extreme variance and rate of change indicators using intraday lows. there's no divergence at this point. some past major lows, such as 1974 and 2002, have occurred without a divergence.