So far, after the last 3 days, it does look like a bear trap...but I still have my doubts that it may prove the opposite and it would be a bull trap at the end. Let see what happens next. The point is that one or two days of no news on the subprime problem makes everyone to forget everything! And when you have everyone assuring the investor that everything is going to be fine then you have to start worrying. Especially, when Bush, last night, said that he is confident that investors will calm down and the market will have a soft landing....soft landing???? Does that mean the market has to go down anyway???? Ohh and he said, investors have to focus on the economic indicators which are very good and the labour market even better....did he see the last employment data at all?????
All I am trying to say, and yes without any charts whatsoever, is that the problem will last for quite long time and yes maybe we ll have the rallies we saw latelly, but then when bad news come out the market will fall like a rock....and we will reach that point when investors will have no confidence anymore and that will lead to a crash...
I had not read Carl's chart spotlight from Friday until tonight but he expresses an idea I had.
Breaking through such a long uptrendline would, on the surface, be technically very bad.
Everybody could see it.
But when "everybody" sees something, Watch Out!
"expect a decline into the cycle trough that would probably break down through the support provided by the bottom of the trading channel, setting up a bear trap."
