Zeev,
Would appreciate your opinion of the following clip from the bear, Bill Fleckenstein. There is a slight correlation between an OPTIMISTIC view of Bill's pattern below, and the turnips, I think.
If I'm not mistaken, the turnips predict a base here, a mini-rally to the Fall, a big correction, and then a continuation of the bull market near year end. Sort of what Fleckenstein is saying, except(<-key word!) he expects a, major bear market instead of a continuation of the bull market.
Thanks,
MikeM(From Florida)
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July 27th, Market Rap-- "It is clear that the recent rally was very narrow. It wasn't particularly well confirmed. The advance/decline line was poor the whole way, and the new highs versus new lows were poor all the way. The put/call ratio was sloppy, sentiment was very bullish, and I think that last week's rally may very well have been the final high. I would expect to see a continuation of this decline.
We will probably see a rally (it started today) at some point and if that rally fails there will be a HUGE decline. It seems almost impossible that it won't fail, because the deterioration that we are seeing right now is so much more powerful than we saw last fall. Last fall, it was legitimately stemming from Asia. Now, not only do we have those problems, we have massive deterioration with respect to leadership and the technical underpinnings of the market. The signs are obvious enough that even a non-technician like myself can see it. I think we are going to have real trouble by the fall.
We might follow the script of 1987, where we had a high in July and August, followed by a smashing and failing rally in September, followed by a bigger collapse. I think that you should behave as though the top is in. Be very careful because it looks as though things could get nasty here in the short run, if not in the long run. Sell the rallies and don't buy the dips." |
