Have a nice weekendA 2007 Combo fractal of 1997-1998: The price actions since 8/16 reflects a combo of 1997-1998. Since 8/16 Vix alert to 1997 level, I commented on the scenario. So far, markets are reflecting a combination of 1997-1998 price actions.
As we can see on the chart, we may be 1998 consolidation price actions after a sharp reversal breakout with srong trend period while 1997 price actions after consolidation breakout which was followed by strong trend period.
One Caveat is that SPX is breaking out after 50% retracement of 20 years rally of 1425% during 1982-2000; therefore, we could see trending-period going into year-end.
http://investorshub....p?board_id=8800
How's 1998 scernario coming along? I commented on 1997-1998 cases since 8/16 reversal day as VIX has risen to 1997 level. Since then, I revisited the scenario in the context which I have considered, not just price patterns.
There are no exact same case scenarios in fractal analysis as history does not repeat exactly the same - impossible as we are living in different timeframe. However, fractal analysis does provide some guidances as we conduct our market analysis.
As we can see, "2007" price actions so far we have seen are similar as "1998" price actions as shown on the charts below. Market daily price actions are overbought which is obvious to most of traders. However, weekly price actions are just turning up. The oscillator actions after extreme level price action often misleads traders to go short, only finding in bear traps while markets continue strong uptrend. That is what has happened during 1998-2000 when traders try to pick tops, only push markets higher.
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&st=1997-06-22&en=1999-07-31&i=p86234312431&a=115071776&r=757.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1970-01-01&i=p88109549175&a=117316241&r=903.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&st=1998-07-01&en=1999-01-31&i=p31595672082&a=96178216&r=279.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=5&dy=0&i=p54891065640&a=117483238&r=534.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&st=1998-07-01&en=1999-01-31&i=p47380608279&a=117481743&r=395.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=5&dy=0&i=p99701641840&a=117483454&r=716.png
http://investorshub....age_id=22563247
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COT
COT shows that large speculators (LS) are being stubborn as they are staying in short. The recent market price action to upside didn't make large speculators' eyes as they are still staying in short. However, I see that a bit of LS covered shorts, but the net position to short side has not changed much.
Meanwhile small speculators (SP) are all over the map as they are switching back and forth long/short.
As market continues to trade up, a net effect is that the net short large speculators are being on wrong side of market as they are not affected by the recent market breakout as we see that they are firmly short.
