I copied Jim Willie's TA post on the S&P, etc., to the Yahoo Rick board, where I frequently gather my acorns, to get the response of the resident TA babe on that board. I also asked her the following question:
Rachimov, btw, TA lingo:
by: blandbutmarvellous (43/M)
3/5/00 10:50 am
Msg: 20505 of 20614
"...the S&P stock index is reversing out of its funkyass downtrend downchannel badboy neighborhood..."
Not having studied TA very thoroughly myself, are these terms commonly accepted and/or generally correct?
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Her response follows:
Bland, perfectly acceptable!
by: Rachimov (29/F/CA)
3/5/00 10:39 pm
Msg: 20614 of 20615
I often think of downtrends as "Funky ass" myself.
honestly tho the poster may be right about a few things, but he's incorrect about the SPX(at least for now)
The SPX has been miserably consistent in it's downtrend. We've had lower highs and lower lows since early Jan. So the first thing we could do(the start a reversal) is make a higher high (above 1444.02) on this rally, then the second thing we need to do is hold the 1325 level on the next downdraft(this is especially important, since if we do just stop at the 1325 level, we've filled in a gap from the Oct time frame and maintained a longer term uptrend).
If we can do those things, I will be more hopeful.
Here is the problem as I see it.
How many people started trading within the past two years? It will be three years for me in Nov.
Ok, so here is the question for people who ONLY trade long(not options or short), how many people would have made more money last year if they had cashed out in July and bought back the exact same stocks in Early Oct, rather than ride out the summer?
Probably nearly everyone.
So with that in mind, We have both the SPX and Dow trying to bottom(The Dow is technically BROKEN too, in a very precarious spot technically), the NDX probably overbought, and it's already March.
Even if the SPX and Dow can make a rally attempt here, it will take them weeks to build back up to some enthusiastic buying, and THEN what? Do we just have the perception that the Dow and SPX have joined the NDX in getting overbought?
where are we when this happens? During the April earnings season? Do we have time to make new highs on the SPX and/or Dow before we get traders selling out prior to "another" difficult summer(real or pre-imagined?)? I mean people are tired right NOW.
Anyway, It's my opinion that it would have been MUCH better if we had gotten eaiser(read a nice broad market) trading the first few months of the year, much better for trading later in the year(after the Annual Xmas Bonus money has been placed and liquidity dries up a bit)
I think people are tired now, especially the institutions, who are paid to be diverse in a market where that has meant underperforming.
Anyway, I am not going to make a prediction about where it's going. I am just going to keep watching the charts, I'de love to see the SPX bottom(It will bottom before the DOw does). Right now, it is still in a downtrend, and has a lot of technical damage to fix before it's put in a bottom.
JIMO
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