DrBob: <<If we could get some perceived calamity to spook the markets, we might not have to drag this bear market out much longer. An example of a calamity or financial crisis is the shock of Japan's banks announcing failures or a Middle East crisis resulting in exploding oil prices. I am not saying that either of these will occur, but I would like to get this market much more oversold in a hurry.>>
I was wondering if we really want a perceived calamity to spook the markets. Such events generally seem to have an immediate effect followed by an almost immediate reversal. If such an event occurred it could even delay a bottom in here, couldn't it? We have certainly seen the start of bear market moves with such perceived calamities such as 1973's oil price hikes and 1990's Iraq crisis. However, I don't recall seeing such a calamity occurring at the end of a bear market. Have you experienced such a shock causing capitulation or a selling climax?
My take in here would be to hope the market does its panicking on basically no news except for the constant and increasing drone of bad news. My guess is that a slower continuing 'dropping of water on the forehead' will work better psychologically than a sudden dropping of a hammer on the head. This would seem to be the best ingredients to hope for at this time. It might take a bit longer than one or two weeks, but the end result might be on firmer ground.
I do agree with your idea that <<stochastics imply a mid-Sept to early Oct bottom possibility...>>. In addition to your 8 indications that the sell-off could be leading to a bottom relatively soon, I might add a few of my own.
This from Indexit: <<Well the Wall Street forecasted summer rally, appears it did not happen, another bad forecast, what a surprise. I guess rats and roaches are not good at predicting.>> Well, I've noticed that in most areas of life 'humans' are also not very successful at predicting. :) I guess TA is useful after all. But I think there may be a silver lining here. The failure of a summer rally this year could easily result in a really heavily over-sold, all-hope-abandoned washout. And occurring (hopefully not too conveniently) in the proper "worst month" September and "knife-catching, bear market ending" October. Now wouldn't that be a neat scenario?
In this scenario arises the good possibility of all those gaps being plastered over. And, for good measure, we have the specter of a possible double bottom looming dating back to March.
And what about that ARMS index? Two days running it has been over 2.0. And a 10-day m/a reading last week of almost 1.7, the second time this year this has occurred - the first around March 21.
A near-perfect scenario approaching? Hey, I'm human - and I'm not good at predicting.
Darn, guess I'll just have to rely on your ol' TA. LOL (But it does look like a rubber band getting pretty tight) |
