Is TODAY the day???

Discussion in 'Trading' started by T/A_Bo, Jul 23, 2002.

  1. T/A_Bo


    In April of 2001 I posted this message showing where I thought the major support lurked for the Dow. We are there, and will test these levels with the market very oversold. This is going to be fun!


    Here is the post link, I'll copy and paste the text.

    Where do we go from here?
    I have been looking at some big picture charts recently, and they are NOT pretty. Indexes are such a deep representation of the crowds actions. They Fib particularly well. I have been using Fibonacci retracement studies to find support levels in the indexes for some time. I caught the QQQ's at the lows on a few of those -400-500 days we had in the nazwhack as we topped and broke down. My friends will remember me frothing at the mouth about Fibs after those trades :) Those trades really helped me build trust in the predictive ability of these simple calculations.

    Let's take a look at the Dow with our Fibonacci studies at the ready.

    First a monthly look at where we are. Two 50% bounces and a deep retracement to the 62% fib which was our last bottom.
    In my experience 62% fibs DO NOT double bottom. Any retest is a shortable event. In my opinion we will lose the Dow 9k area.

    So where does that put us?

    A look at the quarterly Dow chart shows us a number of possible bottoms to use for the Fib studies. If you draw them all, you will see how the lines converge around the 7,600 and 6,750 areas. After we lose the 9,000 area, I would not even consider putting any long term money into Dow stocks until we test the 7,600 area.


    You can Fib time as well as price, these predictions can get hazy and are only something I use as a guideline.
    Fib time-wise, we will see our possible bottom in 3 1/2 to 4 years from the top. (1st quarter 2000) This puts our target out there in early 2003 to late 2004.

    Sooo, if in the winter of 2002 we hit 7,600 in the Dow and form a reversal pattern... I'll load the boat. But until them I'm very happy as a short term trader short MO. :)

    Moral of the story? We are in for a much longer selldown then anybody is talking about. Learn to trade on the short side, we will still find all kinds of short term trading opportunities on the long side, but our market is changing. We will need to learn to trade in a big picture bear market if we are to survive and make a living.

    Good luck and good trading!
    -Bo Yoder
  2. pretty awesome call.
  3. "is today the day?"... I only know that tomorrow is opening day at Saratoga Racetrack. So I'll be golfing in the morning then trackside by noon!:D

    and if I hit a nice trifecta I'll be out on the town 'till they close the bars. if i don't, i'll be home an hour or two earlier.:D

    Happy Trading.
    any good pony picks?
  4. Publias

    Publias Guest

    ahhhh one of my fav tracks!!!! Good luck Uptik

    cool post Bo!
  5. couldn't agree more... nothing like Saratoga in the summer
  6. T/A_Bo


    Market just peeked to a new low and broke under 7700. Extreme TICK reading have been coming in like clockwork. Rather then buy the DIA or go long futures I'm taking out of the money calls in DIA. 84's will give me a very nice risk to reward ratio if my prognostication is proven correct.

    I'd rather do this trade with options because I don't trust this market to pivot cleanly, and would expect to be stopped on a rinse if I bought the futs and set stops under any swing lows.

    With any luck, this fib zone coupled with the extremely oversold market will deliver me a ramp move that gets up in the $88-90 area for DIA. If all goes well I'll still be in these things when I give my seminar at the expo :D Would be a nice war story to tell the folks!


  7. That's great, but how well did Fib predict the 1929 crash?

    also, I've heard Del Mar is great too (but I've never been).
  8. T/A_Bo


    No clue, and couldn't care less! :D

    All I'm interested in here is how will the market respond to THIS level. '29 was before my time.....Hell '87 was too! :)

  9. TGregg


    Hmmmm. . . when I read the title of this thread, I thought it was another joker calling a bottom. But it's not. If nobody calls a bottom on Elite Trader this weekend, could it be that we finally hit it?

    I doubt it. But it sure is fun to speculate.
  10. Rigel


    The odds of calling it are getting better all the time.
    ....................................................................................................NOW! :p
    Yeah Baby, Yeah!:D
    #10     Jul 23, 2002