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Strategies & Market Trends : Longer-Term Market Trends -- Ignore unavailable to you. Want to Upgrade?

To: skinowski who wrote (336)	4/19/2008 10:30:07 AM
From: AllansAlias	Read Replies (1) \| Respond to of 3209

Yeah, it's much easier to predict a short-term high or a low, or some piece of support/resistance, but predicting farther out is pretty tough. The important thing we all seem to agree on is that we want to remain long here and let price action tell us what to do laster on -- i.e., do not outguess ourselves. In the coming weeks, what we should share on this thread imo, are the test case charts. Those charts that hang in the balance once we get over that SPX 1410 mark. To me, these are charts like WMT, MSFT, the financials, transports (esp. FDX), AAPL, -- and many more. These are charts that, to me, show more up coming, but then an important inflection point -- where the bull and bear maps diverge. If it follows the bull map, then we have to stay long -- hell, get longer. -ng The trick, the hard part, what trading boils down to for me, is that portion of time when the bull and bear maps are both in play and price is moving against you. Let me outline what I mean with a scenario. 1) Let's say we get up to SPX 1425, some level that is high enough to shake out weak shorts and bring in late bulls. 2) Price then starts to roll over, right around where we can see, for example, that the financials have completed a putative a-b-c out of the lows -- i.e., the bear map is in play. 3) Things get queer now. This is the hard right edge. Price is moving against us, but both bull and bear maps are in play -- they are both still valid. What does one do? I think we can actually see the area where this action will take place, as we get close to it, with adequate precision. 4-a) Price goes deep enough to shake out bulls and trap bears. Everyone who got long in the March lows is afraid and is looking at quite a paper loss vis a vis the high. We turn back up, but nearly all the swing-level punters got trapped-out. 4-b) Price goes right back to the March lows, in many charts going down through them. The problem in a nutshell is that that maps that support both 4-a) and 4-b) look the same for much of the time that price is falling -- the bull sees a correction and the bear is seeing new decline after an important top.

To: skinowski who wrote (336)	4/19/2008 11:48:04 AM
From: AllansAlias	Respond to of 3209

BTW, we often say "I think we are XXX.", but it is perhaps helpful to say what level of confidence, what degree of analysis, one has done for the call. In that spirit, I would say: 60% chance this rise is a trap and we re-test the lows, as I have already stated, and 40% chance this is going to the moon. I too often do idiotic things, but my Dad tells me I'm not an idiot, and I know he's smarter than me, so I trust what he says -g. I won't be an idiot if WMT busts up out of that congestion, if financials do not turn over again after rising a few more percent, if MSFT does not turn down soon, If TRAN shows follow-through to the upside, if PG does not continue its break down, if semi's do more than pop a few percent here, etc. -- those swing charts I was talking about in earlier posts -- the canaries in the coal mine -- the charts that have valid bear maps that would point down after a bit more of a rise.