Hi John,
Hmmmm....one outrageous statement deserves another? Fair enough.... or were you being serious? Sure, I love a serious rally as much as the next stock player...have a hard time reconciling a massive rally with the current economic climate. Saw a number of new posts Friday on the Layoff Thread....I would think at some point fewer fully employed individuals in the work force should have some effect on spending. PE's still overvalued on average, though admittedly nowhere as severely as Mar 2000! Energy costs and inflationary pressures should eat away at consumer funds.....
and that nagging similarity of the current Nasdaq and the '29 Dow...
OK, all that being said... the current chart pattern on the $compx chart is quite interesting as it has evolved from 4/18 to present. At first, it appeared a rising wedge was forming.
The downward break of 5/10 busted the rising wedge and formed an upward trend channel. Then the downmove of 5/30 and bounce the next day busted the channel and gave way to a megaphone pattern of sorts. The candlesticks of the last two trading days now hint that an upward move testing the upper boundary of the megaphone is imminent. Should we achieve a high around the full moon date of 6/6...that should intersect the 2400 level approximately. Then a downward move for the next week arriving back at the lower boundary of the megaphone....
This would bring us to about the middle of June where I think it is possible, even probable that the pattern will again be busted to the downside. My expectation would then be a retest of the lows (fib retraces) and maybe worse.
Sure, this is maybe too much anticipation and speculation of what hasn't happened yet. Also, the danger of anticipating too strongly can temporarily blind one to the actual events transpiring. I intend to keep an open mind but I have a feeling it may well unfold as I have just hypothesized.
Hopefully, the penny stock breakout game will continue for the next week after taking an apparent breather this last week, otherwise I may well find myself sitting on the sideline for the forseeable future. I will also be scouting for energy (and alternative energy), precious metal plays as defensive type stocks should do well if the market eventually tanks.
My previous statement regarding LG's Adjusted '74 support line was meant to be a possible outcome for weeks and months down the road of this year, not over the course of the next few days. It is seemingly ridiculous to imagine such a catastrophe after the Nas has already been cut in half and more, expecting the Nas to again be cut in half and more!
But, parabolic blow off tops have to be fully repaid, I'm not at all sure the 1600 level low so far pays that debt off entirely.
Thanks for your reply, always a pleasure to hear from you.
Best regards,
Eichler |
