I agree, after looking at today's action and considering option expiration week, I think we are looking at a tradeable bounce on monday. But, I think it won't last more than through next week.
Seanote, But don't u consider the 9,500 as a critical support level for the DOW ? And how about the September low near 1,400 for the composite ?
Bono, This year like many before is conforming to a well established pattern. Cycle high in Jan, cycle low (projected) September. 775 would be a 50% retraction from the all time high. Logical support you would think. 20th of September give or take one or two days. One year from the post Sept 11 low. A pretty basic squaring of time and price. Also if you draw a trend line on the 10 year SP chart across all the major bottoms of that period, a retraction onto this very long term support line comes in around the 700s. If (when) we take out the Sept 11 low, there is simply no significant support levels between there and the 700s. Also if you draw a trend line intersecting the two major lows since the all time high. March 2001 and September 2001. It projects down to reach the very long term support line around the 700s also. We need to take out last Septembers lows to complete three down waves. The longer it takes us to do so, the sharper the sell off will be when it occurs. From a fundamental perspective, 775 would put the S&P 500 back at a PE that instos could deem 'affordable' to buy for the longer term. So I believe a lot of money will enter the market around the Sept October period. But not before the crystallization of (very large) tax losses this year. Im expecting a run up into the end of the month. Maybe as much as 100 points from fridays low. But July 1st the shorts go back on. This is exactly the same method I used to project the Nasdaq high in December 1999. Except I called the high for late April and it came in a little earlier. 775 may sound drastically low for a lot of people. But we've already sold off over 500 points. Does another 200 or so seem unrealistic. It kind of seems logical to me. And before anyone attacks me, please offer your own projection and methodology first. That said, always use stops. Runningbear
RunningBear, E*X*C*E*L*L*E*N*T post I should say. First of all, I like it when people do their own analysis. Second, I admire it when they share it with the rest. Now I know where you're coming from, and I can't disagree, and I don't think anyone would, bearing in mind that the trend is clearly bearish, so before talking about a reversal, we should at least see the market break above a major high. In our case, the S&P's year high at 1177. P.S. Last Friday's "Hammer" formation indeed implies an upcoming rally !
I agree with most- a rally followed by more downside. I don't know where we finally bottom, but the S&P 500 looks like a big head and shoulders formation to me. Any comments?
Sounds like I am the only who expects the market to gap down on Monday, and only then stage a mini-rally.
19th or 20th is my target, 20th is the actual day I have, but due to terrorist attacks last september, it could happen 1 day earlier. I expect that the NAZ will be under 1000 on those days, and I will be majorly long because the trend is about to change to UP. The key to the markets is in knowing when the trend change will happen. If we get a new high on the weekly chart, this will verify the trend is up as well.
Here's the Lowry's '90% day' study that someone else posted a while ago, and that I referred to on some thread somewhere. Very good read, especially at this moment. http://www.lowrysreports.com/samples/dow.pdf
Lescor, it does look like a H&S to me. However, I would draw my neckline from your left shoulder moving up to the '01 low at 1,100. This way, the break would have occured on a Bearish Gap, followed by a Traders' Remorse back to the neckline, and now resuming down.