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Gold/Mining/Energy : Big Dog's Boom Boom Room -- Ignore unavailable to you. Want to Upgrade?

To: rubbersoul who wrote (113574)	11/16/2008 4:48:37 PM
From: Q8	4 Recommendations Read Replies (2) \| Respond to of 206182

Rubbersoul: First, this is my favorite article on the market going forward financialsense.com Here is my take on the market going forward: As I have posted here before, the market is in a contracting triangle/pennant. These are continuation patterns that resolve sharply and reinforce the view that we will see eventual newer lows. Nearer term however(next few month), there is probably more ranging within the pattern before finally resolving to the downside. For now for the shorter term, would fade the extremes of the pattern (buying an approach of the base, currently at 8250 and shorting an approach of the ceiling, currently at 9650) but with the expectation of an eventual downside resolution of the triangle/pennant. Longer term, the bearish bias over the last year but the market is nearing a potentially major bottom (for at least 3-6 months and minimum 25-30% bounce). Currently, the market is within the final downleg on the whole fall from the Oct 2007 high at 14198. However, this final downleg (which began at the May high at 13137) is still not “complete” and suggests a final push below the Oct 10th low at 7883 (also a 50% retracement from the post 1987 crash at 1616) to complete a potentially important bottom. So for now, would maintain the long held, longer term bearish view but will be looking for signs of a significant bottom on another downleg to new lows (and looking for an opportunity to reverse to the long side for the bigger picture). I have posted in the past that I expect to see the low for this phase on or around March to 7248. Can anyone please dig out my post and see exactly what day I stated? Here is a graph of my short term SP500 2.bp.blogspot.com Now here is the reason also why we need to go back down and test the Oct. 10, 2008 low, because of this double top An important note regarding the 8000 level. See NYSE volume in the graph below Looking at the two days on which the Dow dropped below 8,000—October 10, 2008 and November 13, 2008 you can see that volume spiked. This is no coincidence. What we learn from volume here is that when investors saw the Dow Jones Industrial Average drop below 8,000, they saw it as a buying opportunity for stocks and rushed in to buy. This increased buying pushed the Dow safely back up over 8,000. The best part is that we have seen it happen twice. This tells us that investors have set 8,000 as a mental buy point and that 8,000 should hold up as a significant price support level. Now regarding whether you should just short the SP500, I do not know how much money you would put into play not knowing your positions and assets, but I would be careful to only put speculative money into play into such a stock strategy going forward.