There seems to be much ado about nothing all over the TV tonight because the market "rallied" 400+ points on a late day Friday rally to end the week 400+ points DOWN! The media are so giddy as if everything is just fine now. However, If you put away your five minute charts and your tick charts for a second and take a look at the big picture here is what you see on the S&P. The lowest weekly closing price of the 2000-2002 bear market was 800.58 Today's close, a weekly close, was 800.03 Think it was a coincidence? I think not. It is a point where bulls and bears are fighting. Technically it closed BELOW resistance. And the daily chart looks very bearish to me, like a short covering rally right up to the resistance point. But I think it's too close to call it yet since an oversold bear rally is always possible if not probable. So now we have to turn to the monthly chart which closes next week. We are looking at 815.28 Close above that and the bull have hope. Close below that and the bears have confirmation. I am not making any predictions, just pointing to the facts. However, I did make some nice profits in PUTS and short futures positions the past few weeks and I took a small call position in DIA Thursday when $indu touched 7528.40 (can you figure out where I got that # from?).
I remember reading about a survey of funds managers many years ago. In it was asked how many looked at a daily, weekly or even a monthly chart and it was suprising how few did. If you look at the chart then you see the real battle was around 850 - that support was tested a few times and it looks like it now has become resistance. bad, bad, bad..... Maria
it is hard for me to believe any significance to a low that was set up 6 years ago on an index. it is as significant as any number in a reasonably attainable range. in 6 years the composition of the index is very different, companies have paid dividends that are ignored by the index, there has been significant inflation, etc. the equivalent of the exact point reached 6 years ago could easily be off by 20%.
Seems like I remember reading somewhere that the market has a "memory" of about 4 years. Anything further back was, according to them, not normally worth looking at.
Well the 2000 high seemed to be significant in 2007. An almost perfect double top.........7 YEARS APART. You don't have to believe it. Just have an open mind.