Warp:
I think the powers that be want us to have a spring rally, and I can't tell how high it's going to go. I don't think it lasts into mid-June, if that far, and believe the powers that be will launch us into the final plunge of this 3+ year bear market this summer, a double bounce with September/October's actually being higher and on lighter volume. If that happens, it begets a further question: how long do we stay moving sideways like a crab after the obligatory dead cat bounces?
Looking at your chart, you can see that from early May the whole thing just descended into pain, for what seems to be about a 650 point drop. Assuming we can rally here to close to 1500 in the Naz, a slightly smaller drop of 600 or so takes us down into the triple digits and a likely bottom for the Naz. Call it 950 for now.
Certain rules apply to the markets, and it's up to us to find out what the timing is supposed to be for them. After the bull run, the bear plunge must find a bottom, and will most likely find that bottom amidst pain and suffering. The bigger the run, the bigger the correction. When I try to imagine the mood, last July comes to mind. Of the 3 main averages, the Naz clearly had the most froth and fiction to it, and has corrected the most; maybe it bounces off the round 1000 level and declares an end to it. The Dow of 6,000 seems likely, taking out previous 5 year lows, and a SPX of 650 seems just as likely.
Just an opinion or two,
Kb |
