Wednesday, February 04, 2009

Begin the Beguine



Here is an updated 60-minute chart of the SPX, showing an ending corrective wave right at the 61.8% retracement level of the previous decline. Cole Porter notwithstanding, it appears that another severe decline has begun.

Watch the 812 level on the SPX, it represents the previous low, if it gets taken out with conviction, the floodgates should open to the downside.


A

11 comments:

Mike said...

Personally...I'd really like to see another downdraft.

Cathartic...to say the least.

Thanks for the insight Allan.

Way more than I could ever establish.

-Mike

Wayne said...

ditto what Mike said, thx for the uncanny calls you're making Allan! As I saw movement easing up I bought some more QID shares near today's lows right as the S&P reached that 61% mark.

good luck to all,
Wayne

Anonymous said...

Allan:

Shifting gears from the current subject, what do you feel about the grant request by NNVC to the DOD? I suppose my question should be.... What do you expect this grant money to do to the future value to do if they get approved or even if they don't? One would think that taking 'free' money increases the value as you've added working capital, but on the same note, they need this money becuase they're not producing revenue generating results.

I am holding, and buying more every week, so that's not a question for me. I am just trying to assess future responsibilities this may create and any potential changes in overall-valuation, as the target everyone who contributes to this blog ranges from $20-$200 ea (and the one guy who said $1540 each, which would be AWESOME but is likely wishful thinking).

-PSU Eric

Allan said...

Eric: Don't have time this morning to go into details and it would take it's own blog to describe everything that NNVC has going for it. In a gross oversimplification, they developing and testing about 8-10 anti-viricides, most of which have potential markets from $0.5B-$1.0B; they will collaborate with big pharma on some but would like to cut deals from a position of strength, which means they are not desperate or needy of cash and can negotiate accordingly. A grant (or collaboration with big pharma/gov't/universities) means cash infusions, thus strengthening the company's cash-flow and stance in negotiating future deals. The more cash that comes in now, in the early stages of development, translates into great leverage for the company's pipeline and it's future market capitalization.

Anonymous said...

Allan:

I appreciate your response and vote of confidence given this development. I viewed the DOD grant request as maybe leveraging the gov't into NNVC too much as they already have ties with some of their developing products - with the US Army I believe. I am already vested into NNVC and the understanding of how capable this stock is so I am glad you skipped the background stuff. I am not sure I agree with your statment regarding their cash-flows as the good Dr. has mentioned several times that they cannot operate past mid-year 2009 in their current position. Just concerned that the gov't maybe dipping too much into everything they can these days. No need to respond, I believe you covered my question the first time, I'm just making sure I was clear enough for everyone who reads this chat.

Thanks again Allan.

-PSU Eric

Anonymous said...

Any thoughts on what we've seen so far today? It looked early on like the market was just going to roll over but now we're seeing a decent turnaround from that.

Anonymous said...

Possibility?: the wedge formation being formed here may be holding. It points to a breakout, one way or the other. Todays upturn keeps it just inside the lower line of the wedge.

I grant you this TA is simplistic compared to the EW, but I have seen it work in the past.

Piecemaker

Allan said...

It would be nice if the market would conform to my forecasts to a T. But that is not the real world. In this world, markets zig and zag trying to shake off the weak hands with every twist and turn. Only when the market says it's time, is it time. Meanwhile, we wait patiently, allowing the market to carve out its own path within the big picture forecast it has already signaled it is following. Nothing has changed from last night's analysis.

Michael Lomker said...

"Nothing has changed from last night's analysis."

Not true! It gives you another place to short from.

All of this buying into Friday's (reportedly horrendous) NFP report is interesting. It smacks of market manipulation to me.

Dave said...

Allan:
Since I discovered your blog almost a year ago, I have been awestruck by your accuracy and refreshed by your candor. I also know that you would be the first to say that if you were right only half of the time that you would still be ahead. That said, is it possible that the EW model has no way of factoring-in the extreme differences in today's scenario? Is it possible for the herd to behave in an unpredictable manner this time? Wondering minds and all that...
Respectfully,
Dave

Wayne said...

Oh well, stop triggered. The SP500 hit the 0.988 level so far today (in Fibonacci terms).

If you post a daily chart from 10/14 and draw a trendline that skims the highs at 11/04 and 1/6, it looks like the next touch point would be around 900. I'll look to short there for another ride down, with maybe a nibble at 875 in case Allan's thesis holds.

I'm inclined to agree with the posters who say the gov't is propping up the market. For as long as it plays both ways, I'll probably also ride it up from the 820's.

Wayne