6 replies to this topic

[Caduceus]

$NYHL:$NYTOT failed to produce a bottom after reaching the blue line. Historically after hitting this level (blue line) it has produced a rally immediatly with no more than about a 2% intraday drawdown. Previously to the current market the only other time this had failed was in 1998. In 1998 we saw the market produce a larger extreme at the area of the green line (where we just tested). In 98' it produced a rally of about 110 SPX points or 13%. This would put us at 1480 only 34 points from here, or if we see a similar percentage move we could see a double top at 1548. I have marked the points at which one could have decided to go long based on these extremes (either after hitting the blue line or after a turn up after touching it). The green arrows mark where one could have traded long based on hitting the green line or after a turn up after passing through it. I think the two timeframes have their similarities and their differences but I will be paying attention to this prior precedent as it was at a 4yr low and related to liquidity. The advance decline line was much weaker in 1998. [attachment=5877:attachment] [attachment=5878:attachment] [attachment=5876:attachment]

[Trend-Signals]

I commented on the extreme breadth level and also showing positive divergences.


http://www.traders-t...showtopic=74680


As noted below:

IT'S 1997....

http://www.traders-t...showtopic=75006



1997 Price Action Pattern:


I commented on VIX breakout in Jun-Jul 2006 bottom call that market is showing similar pattern of 1995.

The current price pattern shows that we are in 1997 pattern when market corrected 10% after a correction of 7%+/- which is Jun-Jul 2006 low.




In 1997, we didn't have a retest of the low after similar "W" formation with lower/low with 10 %+/- correction which is the VIX level 37 which we have seen. After 1997 10% correction, market rallied 60% before 1998 correction of 20%.

In 1998, after 1997 bottom followed by a rally to 60%, we had 20% +/- correction with higher VIX level to 47.

Edited by Trend-Signals, 18 August 2007 - 12:42 PM.

[Caduceus]

You are right, there are many similarities with 1997 as well. In that case my GUESS would be we will see higher prices in the 1480 - 1500 range followed by a retracement down to 1440 - 1400 befrore the rally starts to have "trending" characteristics. One difference with the 1997 timeframe is that it was a 2-3 day shock, the current correction has been more of the grinding decline variety. Thanks for sharing your work here, and nice call at the March low this year...

[Trend-Signals]

Thanks, Caduceus


The KEY points are: The VIX level, climactic volume action, and sequential % Correction.....


Good luck to you




~~~

CLIMACTIC VOLUMES: All about VOLUMES...

Climactic action on 8/16/2007 = Climactic action on 10/28/1997 with extremely high volume and the same VIX level to 37.

Conversely, after you study 1998 climactic volume reversal action, you will see: "Its 1997"!


Charts:
http://investorshub....age_id=22181738
http://www.traders-t...showtopic=75006

~~~






1997 Price Action Pattern:


I commented on VIX breakout in Jun-Jul 2006 bottom call that market is showing similar pattern of 1995.

The current price pattern shows that we are in 1997 pattern when market corrected 10% after a correction of 7%+/- which is Jun-Jul 2006 low.


In 1997, we didn't have a retest of the low after similar "W" formation with lower/low with 10 %+/- correction which is the VIX level 37 which we have seen. After 1997 10% correction, market rallied 60% before 1998 correction of 20%.

In 1998, after 1997 bottom followed by a rally to 60%, we had 20% +/- correction with higher VIX level to 47.

[Caduceus]

Just for reference: [attachment=5880:attachment] [attachment=5881:attachment] [attachment=5882:attachment]

[Trend-Signals]

Just for reference:
[attachment=5880:attachment]
[attachment=5881:attachment]
[attachment=5882:attachment]

Yes, also SPX ...




http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p11042313686&a=78987374&r=755.png



The Climactic Reversal low on 8/16/2007 and retest:

We will not likely see "Retest of the low", because the low was below the key support areas and was with selling-exhaustion with climactic reversal volume action.

Why do you think that the Fed announced the cut?

Usually, a low in light volumes is retested, but not with extremely high volumes, especially, reversal at below key levels with climactic volumes. What we have seen is BULLS came out and fiercely defended.

8/16/2007 and 10/28/1997:

You will see Climactic reversal patterns with high volumes on those days with the same VIX breakout to 37 +/-

http://investorshub....age_id=22181738

[relax]

you make a great point but thinking more about one has to admit that it was an fake move in that thursday's reversal may simply have been rumours of the fed move if we had the reversal without the fed news I would be believing the reversal big time i agree that judging from the charts this seems like a clear reversal and i think the right way to play this is to let the bears try and make the reversal - cause technically the bulls have switched it to their advantage first indication that bears are getting the upper hand again is a closing of the nas gap IMO exciting tomorrow! no news will be good news