Irene:
Hi, and best regards to you...and Mel, Mark, Lee, etc. Nice to
see some familiar names from the *P Microcap arena. I do miss that
board, but I just couldn't stomach any more of the ongoing problems
accessing the service, etc.
Lee...I try not to get involved in the game of "pick a top/pick a
bottom." The streets are littered with the bodies of newsletter
writers and investors who have had 90% losses of their original
principal trying to do just that.
As far as IMMD is concerned, I just don't see a great deal of
downside here. The chart suggests the bulk of the downside is
behind us, and the trend seems to have switched from "down" to
"basing." I continue to look at the vast divergence between price
action and the behavior of certain key technical indicators. Prices
notwithstanding, there is a clear pattern of unabated accumulation
here since May. The disparity between prices and the technicals
is strongly suggestive of a market which is being artificially held
in check. I can't predict how long this is liable to go on - the
best I can offer is a quote of Tom DeMarks excellent comment..."bear
markets end when the last poor dumb s.o.b. gives up and sells." I
can offer an example of what happens when a market artificially
suppressed is suddenly given free reign. Take a look at gold prices
from about 1930 through the late '70's. For much of that time, gold
prices were artificially "fixed" by government decree at $35/oz.
Then in the late '60's, the controls came off and gold became a
freely traded commodity with prices determined by free market action.....with prices advancing about 24-fold. Granted, the
comparison to IMMD is not precise - different market dynamics - but
the point is this: Artificially depressing prices is like trying
to compress a coiled spring; it will work only as long as you keep
the pressure on. Remove the pressure and not only does the spring
shoot out to its full, uncompressed length, but the transfer of kinetic energy through the length of the spring actually causes it to jump off the ground. What happens is prices, which would have been in a steady uptrend if left
to their own devices, reclaim all the lost ground in a much shorter
period of time. My best armchair guess at this point is that IMMD
will trace out Bill O'Neill's classic "cup and saucer" chart
formation. If this scenario plays out, we should see the old all-time high be challenged about 5 months after the final bottom - assuming that bottom is imminent - and the bulk of that move
will probably occur in a few weeks of trading. That would be about
a 270% return from current levels. Don't you suppose the people
behind all that stealth buying that's been going on for the last 2
months are prepared to wait patiently for that kind of return? Well,
now that I'm winded - sort of - I think I'll go look for a DCIC
topic, as there is a potentially very bullish chart formation
unfolding in that puppy!
Art |
