Longer-Term Market Trends Message Board

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Strategies & Market Trends : Longer-Term Market Trends

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To: jjstingray who wrote (1837)	10/3/2008 6:34:26 PM
From: skinowski	Read Replies (2) of 3209

J., to borrow your chart for a minute, if you start your lower line at the March low then something rather interesting happens. You will be looking at something very reminiscent of a Leading Diagonal, counting since the top a year ago. This is an idea that came up in a conversation between Ray and me a few days ago. It does make sense -- if we are looking at a decline which may take a few years to play out, it is only fitting that the first down leg would take an entire year to play out. This scenario would imply a substantial rally which would begin (probably) relatively soon. It would mess up bears, it would run long enough and hard enough to restore optimism and bullishness which we saw near the top. In other words, it would have the psychology of a Wave 2 or B. Ultimately, it would fail. Alternatively, the setup for an accelerated decline from here is still active. Also, it is not always necessary that every index should be doing the same thing - witness the difference between Nasdaq and SP/INDU back in 2000 - 2002. We'll just have to see how all this shapes out.... the game continues to be as interesting as ever (g).

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