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Strategies & Market Trends : Technology Stocks & Market Talk With Don Wolanchuk
SOXL 53.91+8.6%Jan 9 4:00 PM EST
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To: Investor2 who wrote (34761)10/28/2008 10:51:27 PM
From: bearshark   of 207728
 
Some people think that the forced liquidation by folding banks and hedge funds create a situation where standard technical analysis and chart formations just won't work.

I believe I said something like that here. For example, my little analysis said there would be a low around 10/8/08. A couple of days ago, I mentioned that the same analysis said there was a low at the end of the day on 10/24/08. The first didn't work because of the forced selling which did not allow a normal release of negativity. The second may be working--if there is a multi-day move up. If not, I'll assume it is not working for similar reasons.

Now, I use sentiment, and my little analysis will be affected by extremes and odd trading as shown above. I use 8 years of data on my main computer and this October is unique by its extremes.

Are charts affected? I don't think so. Is Dow Theory in regard to the movements of markets affected? I don't think so.

Since you mentioned double bottom I was thinking that it is the cruelest part of a bear market when I posted the note.

However, as Edson Gould said: "After making a bottom . . . , the market experiences a sharp rise . . . , then a relatively slow decline more than halfway back to the bottom . . . , then a move upward above the rally high." "That is the "Sign of the Bull" Watch for it over the next several months.
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