Let the games begin:
We went down and tested below the Oct 10, 2008 lows.
Art Hogan should be ashamed of himself. On national TV he proclaimed that it was the low for the year.
Oct. 10, 2008 Low 7882.51
Today Nov. 20 Low 7774.58
Please study my post of last Sunday posted on my blog titled:
oilservicestocks.blogspot.com
Sunday, November 16, 2008
How the Dow will perform
Here is the chart I drew:
2.bp.blogspot.com
And here is the narrative that went with it:
Here is my take on the market going forward:
As I have posted here before, the market is in a contracting triangle/pennant. These are continuation patterns that resolve sharply and reinforce the view that we will see eventual newer lows.
Nearer term however(next few month), there is probably more ranging within the pattern before finanly resolving to the dwonside.
For now for the shorter term, would fade the extremes of the pattern (buying an approach of the base, currently at 8250 and shorting an approach of the ceiling, currently at 9650) but with the expectation of an eventual downside resolution of the triangle/pennant.
Longer term, the bearish bias over the last year but the market is nearing a potentially major bottom (for at least 3-6 months and minimum 25-30% bounce). Currently, the market is within the final downleg on the whole fall from the Oct 2007 high at 14198.
However, this final downleg (which began at the May high at 13137) is still not “complete” and suggests a final push below the Oct 10th low at 7883 (also a 50% retracement from the post 1987 crash at 1616) to complete a potentially important bottom.
So for now, would maintain the long held, longer term bearish view but will be looking for signs of a significant bottom on another downleg to new lows (and looking for an opportunity to reverse to the long side for the bigger picture).
I have posted in the past that I expect to see the low for this phase on or around March to 7248. |
