Sunday, December 16, 2007
As the Spring Coils
A look at the charts shows the last 3 minutes of Fridays trade took out the hammer bottom on the 60 minute chart. We must now look to the daily support levels. The close Friday was near the bottom of the 29 day trading band but just above the most recent sell fractal at 1460. If you follow the blog you will know that I've posted about the gap in the chart. The gap on the daily, 60 and 1 minute charts is screaming. Look for support at that level. I've noticed over the past several years that the most recognized chart patterns are beginning to mutate into new formations. The old Head & Shoulders is becoming the Two Headed Monster. Catch the drift? Because of that I'm going to draw in the most important trend line on the daily chart. It will reflect the NECKLINE of the 2HEADEDMONSTER. It will be colored PURPLE and if it is broken I will be a BEAR. DAILY CHART
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I've read so many things this weekend, attempting to decide whether I should stay or go. If we get one more upswing, I'm out and back to T-bond money market funds and cash, for a quarter. I'm tracking Soros, Jim Rogers and all the smart money, and they are going to India. I could post about what I've found, but I'm in denial right now. I was hoping you'd show a bounce in your tech analysis, but as I read it, you're on the fence as well. Is this a correct assessment?
I feel the past six months have been a consolidation of the big run-up the market has had since July of 2006. The volatility has been hard to stomach but long term we are still in a bull market. I'm still content in waiting to see how the market reacts to the gap on the daily chart. We are at or near the 9 month cycle lows.One post I read at optioneticts explains things pretty well.(http://www.optionetics.com/market/articles/18650) From what I've read many traders are throwing in the towel. Kirk for one (http://www.thekirkreport.com/2007/12/12/index.html)
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