futurecurrents, this is the type of posts I would call a lesson in technical analysis in reply to your "CNBC & Gurus" post ... but before I do, I'd like to clarify that I'm not a guru, I'm simply a true lover of the art of technical analysis .. please read the following part, from one of my articles ... then I would resume on another post : --- Start of Quote --- The stop-loss level, actually implies much more than just an alert to square a trade with a minimum loss. It demonstrates the great flexibility of the art, since as we will discover later, technical analysis is a very subjective art. Consequently, two technicians may sit to analyze the same chart, and yet come up with two opposing views or recommendations. The market would eventually move in favor of either recommendation, and by doing so, break the stop-loss level of the other. At which point, both analysts would meet, since in most cases the break of a properly placed stop-loss level, implies a reversal in the prevailing trend. Such an example also shows, that by expressing a technical view, technicians actually have two views. A preferred view, upon which their recommendation is based, backed by higher odds on the one side. And a counter-view where the market would move against them, break their stop and cause them to get out with a minimum loss on the other. So technicians may disagree as much as they like, as long as one day they know theyâll all take the same road home. A very dear friend of mine once told me when were exchanging views on the US Dollar / Deutsche Mark chart : âWe both agree, then weâre in trouble !â. And I will treasure that statement for a lifetime to come, because if we only consider the preferred scenario, we eventually get obsessed by it and refuse to listen to the chart or accept any other outcome, and thatâs when weâre the most exposed to severe losses. --- End of Quote ---
Actually, I agree with that analysis and came up with it myself independently. I thought it up with my own little brain. VIX,support levels, candlesticks... holy smokes I've turned into a prognosticator! I'm learning to feel my way forward in the dark! ************************************** It is the theory that decides what can be observed. Albert Einstein
futurecurrents, now let's get back to all my recent posts on this thread, and re-capture the whole picture : 1) I stated that the DOW and S&P 500 have both formed a "Hammer", so as far as candlesticks are concerned, the market should start the week with a rally. 2) I stated that the anticipated rally should constitute a very good opportunity to go short, and not to be confused for a trend reversal or to go long. 3) I stated a very critical resistance level on the Composite, and reiterated that this is where the composite should resume lower, if it ever intends to do so, because otherwise, it could be heading up for a little while. i.e. this is where shorts should place their stops. If after all those posts, you still consider that as a "CNBC Guru" type of view, then I'm really sorry to tell you that you should reconsider technical analysis as a mean to trade this market You take care !
i dreamt i saw the skeleton of a huge, dead cat..like a dinosaur. since then, CAT has been down 4 dollars.
ok Bono. I can't accuse you of being ambivalent. So maybe I'll accuse you of not saying why technically the market will continue down. If you have already, I apologize. I haven't heard it from anyone. Personally I favor the idea that the bottom is in already. But I'd be the first to admit my inability to predict the future. I enjoy your posts.
glad you like it, TriPack. actually i have to say that i myself try not being bull or bear. but there are a few articles on that page that come up with some good points. perhaps you also check the one about massive daily nasdaq rallies.
A bull or a bear, I do not much care, I just move with the flow, either way I will go. I sing this to myself every morning. Runningbear
Futurecurrents, thanks, I did say why markets should resume lower I basically use the most simple techniques to determine that ... 1) Trendlines : If you draw a negative trendline coming down from the all time high of the composite at 5132.50 in March '00, through the August high of the same year, you will find that this line will intersect this year's high set in January at 2098.90 and the March '02 high afterwards ... making it very indicative for the current bear market ... only if the market breaks above this trendline, I migh be ready to conclude that the bear market is over .... otherwise, we are just witnessing some short-term recoveries ... 2) Support & Resistance : For the 3rd year running, the market is unable to break above any major high set during this period ... major highs set are as follows : 5132.50 (March '00) - 4298.10 (August '00) - 2850 (January '01) - 2328.10 (May '01) and finally 2098.90 (January '02) ... so as u can see, once again this 2098.90 level plays a critical pivotal role ... if broken, it would also imply a break above the major negative trendline, and a clear reversal of the whole bear trend ... i.e. higher highs, higher lows. Of course, I'm approaching the market here from a long-term view, but, of course, if we're talking short-term, there would be a lot of buying opportunites, such as the current move started last Friday. By the way, the overall performance of the market shows that at least for now, the downward momentum is beginning to fade, as both impulses and reactions are taking longer time to unfold ... but we still need to see a decisive break above 2098.90 and the negative trendline ... before concluding a bottom in a place ... Regards !
posted by bono "1) Trendlines : If you draw a negative trendline coming down from the all time high of the composite at 5132.50 in March '00, through the August high of the same year, you will find that this line will intersect this year's high set in January at 2098.90 and the March '02 high afterwards .." ********************************** Umm, I'm looking at that exact chart and trendline right now, and whether I use log or arithmetic scale, the line does not does not come near where you say it does. On the log scale I use the trendline is at 2000. I'm using Q-charts of the nasdaq combined composite index. What up? What I do see is support points at 1500 dating back to '98 ************************************************** "Your reality, sir, is lies and balderdash and I'm delighted to say that I have no grasp of if whatsoever." - Baron Munchausen