4 replies to this topic

[relax]

should we be seeing three white candles in a row When we were moving up we did not see three black candles so today is quite important in that regard today should be down if, if we are in a downtrend and heading for a lower low how do you guys see it

[arbman]

Tomorrow is critical, but not that much critical, the price has to stay below 1430-1440 for about 1.5 wks to trigger the 40 wk FLD and then it would project about 120 points downside, very unlikely at this juncture.

In fact, the prices must rally and not come back to test the current range for the rest of the month to avoid that kind of a fate since the 40 wk FLD will rise to 1460 region by the end of the month. I think it is possible to go over 1500 and establish support there at least given that the good majority of the issues sold off very hard. The immediate major resistance then stays as the 1500 gap.

If the prices rally from here to 1500, the 10 wk FLD will trigger toward roughly to the 1550 region in about 7-8 sessions and it is likely to double top and stall there over the next 1-1.5 months, then the 10 wk FLD will catch up with it and there might be another trigger into Oct of about 30-40 points to the next 10 wk nest of lows or back to 1500 and there is a chance to in turn trigger the 40 wk FLD one more time. This would be bad, because it has the potential to take out these lows then, but it is too far out and unpredictable for now...

I think the path is clear for the upside given the cyclical configuration and solid internal bottom...

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&b=5&g=0&i=p44934906172&r=5207&.png

- kisa

Edited by kisacik, 03 August 2007 - 03:34 AM.

[relax]

Thanks for a clear comment kisa FLD - what does it stand for? You say that 40 week FLD is expected to rise to 1.460 by end of month - is it a combination of a cycle and price projection cheers

[arbman]

It is a very detailed subject, do yourself a favor and learn the whole thing, nothing to loose there...

Basically, FLD is a clever cyclical method that estimates the expected magnitude of a swing based on where you are in the swing. The FLD line is essentially the previous cycle shifted forward by its half span. So, when the current cycle is increasing, its FLD is decreasing, so the earlier the prices cross their FLD lines the stronger and healthier the cyclical trend it is...

Just like the standard deviations and slope determine the strength of an underlying trend, the cycles is the best way to analyze the volatility or market timing...

- kisa

Edited by kisacik, 03 August 2007 - 08:16 AM.

[relax]

Thanks for the link! As expected looks like three white candles was asking for too much