Judy; RE:" Market Scenarios..."
>>"we could see a significant rally occur with everyone expecting
it to be short-lived and it just keeps going."
>If this scenario plays out, then when the market corrects,
it will be severe. Market needs a firm base from which to move up.
FWIW, we've got some results from a chaos-driven model in Germany; it called the market break-down several weeks ago (albeit, too early).
At present it is projecting another break-down, past perceived support at DJIA 7200, such that 7200 becomes the Top of a new trading range.
Right now, we're pushing up to DJIA 7800 in this little "rally that no one expected to happen" that Tom was referring to - I strongly agree that any break-down from this level would be all the more disheartening.
You mentioned a "lack of leadership" - apparently, we are moving the DOW from the US financial sector at the moment; also, there appears to be a surplus of capital needing to go (somewhare) into something other than 30-year Treasuries, finding it's way into US equities. At least, that's what analysts are saying about "today".
Where's the BASE ?? One scenario is a trading range between DJIA ~7400 and ~7800. Our model (over here in EU) says -600 points lower than that.
-Steve |
