Thursday, March 05, 2009

Deja two

That was easy.

Above is a continuation of last night's 30 minute DJIA chart. Note two "tells." First, a break-down of the shorter trend lines running across the longer trend lines. Next, look at the position of the False Bar Stochastic. As with the previous breakdown a few days ago, the FBS was again overbought and crossing over just as price broke down. A powerful 1-2 punch.

What next?

How about Deja two?

Above is a one minute DJIA chart going into Thursday's close. A familiar pattern, dueling trend channels and an overbought FBS.

This time, I know it can't be this easy.

Can it?



Anonymous said...

I thought this from CARLFUTIA.COM was interesting. "Just for fun I did some calculations of the worst inflation-adjusted U.S. stock market drops during the 20th century. These occurred during 1929-32, 1937-42, and 1966-82. In each case I took the Dow Industrial's high close and low close for the change in the consumer price index since the year of the high close (I used yearly numbers for this index). Here are the results.

1929-1932 down 87%
1937-1942 down 59%
1966-1982 down 74%

Then I took the high close of the S&P 500 in 2000, namely 1527, today's low close at 683 and also made the inflation adjustment to obtain:

2000-2009 down 64%

To match the 66-82 episode the S&P would have to drop to 497, about 28% lower than today's close. To match the 29-32 drop the S&P would have to fall another 64% to 248.

To put these last two numbers in perspective you should note that the S&P 500 has dropped nearly 23% during the past 4 weeks."

Anonymous said...

wow, down down and down. the waves just dont end. Allan: Where are we in a large scheme of things? In one of your earlier posts you had said that wave 5 would end with 6500 the lowest point and 6900 the highest?

Anonymous said...

That was me Inq. does not let me re-edit. Also I have been watching GLD closely with the cycle wave you gave a few days back. Are we headed for $80 for GLD? Whats the wave count looking like?

A said...

If Prechter's vision of a Grand SuperCycle Bear is right, then this market decline will the worse in time and amplitude then all previous bear markets of the last 200 years. That means worse then those inflation adjusted numbers posted earlier. It doesn't mean tomorrow, although I wouldn't put anything past this monster bear.

Anonymous said...

Sigh so forget about DOW 6000. Bring it on DOW 2000!!!

I thought you guys might enjoy this expose on Cramer.

Anonymous said...

Thanks Allan for the info on this blog, good stuff. 2 quick questions from a long time lurker.

Shouldnt wave 4 be starting any time now? maybe even some time today? so wouldnt it be prudent to start to postion oneself for a retest of say 740 on the s&p?

Also, what kinda time frame are we looking at regarding NNVC? Im assuming there would have to be some kind of trial and evenually an FDA approval (the FDA what a nightmare). or am i missing something?


Anonymous said...

Hey Allan,

A while back you had posted observations on a "4-pack" of tickers involving GLD, USO and others. The only one you believed could make short-term gains was USO, perhaps reaching the low 30's. Has your outlook on that changed?


A said...

Wayne: On February 25th I suggested that USO could rise into the low 30's, at a minimum. It has risen about 5% in the two weeks since making that forecast. No changes in targets, but, USO has not risen as fast as I had expected. Although 5% in two weeks is nothing to complain about, we always want more here at AllAllan.

Anonymous said...

I guess it was that easy.

Anonymous said...

Also with waves you had suggested that GLD might go down and then up. What do the waves and cycles say about GLD?