re: now does seem like a realistic moment to start drafting downside targets with more precision.
I'm waiting for the neckline, it's almost to pat though.
Interesting take you just posted, taking in the downside gap and the upside gap. For me to understand the relationship I have to get into the heads of the players at that those times. Before the downside gap you mentioned happen, the market was gaping down a lot. I would venture to say that sellers by the time of the gap down at the 2000 area were selling with hands thrown up in the air while potential buyers were on strike, while a good % of the remaining weak holders got flushed during the April bottom. Some people will contend that that the vol. wasn't enough at the April bottom to flush out the weak holders, I have contended that the length and relentlessness of the bear served that purpose. You have take into consideration how the holders that are still holding from that period feel about what is happening now. Are the holders that are left from that time period so entrenched as longs that they will not care? I would venture to say that good percentage of them are. So, I'm not too concern about that gap down holders, but I am the gap down sellers. I would be more concern about gap down sellers that bought in at the most recent gap up since that is newer money coming from the bulk of the sellers before and during the gap down, buying back in, and more scared. So, as market moves through the neckline of the H&S, the vol. should pick up for fear of having to watch their holding experience another dreaded drop like in the past and to see their gains vanished from hastily buying in during the gap up, since the neckline violation is pretty close to 2000 area, with vol. picking up more as we go through 2000. Which could, by that time, cause a washing out of the sellers and bring out the holders and all that sideline money, setting up support in the lower 1900, higher 1800. hmmm, Just seems too easy. <g> |
