We have two bearish patterns on the S&P 30 minute chart right now, the Megaphone and the Bearish Rising Wedge. Both patterns would remain valid even if the S&P rose into the low to mid 1190s early next week. Whenever the S&P violates the lower red boundary of the Rising Wedge may well spark the anticipated correction.
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Correction?
ReplyDeleteThis market is NEVER going down again.
As long as Bernake can continue to buy assets we are going higher.
Calling for a correction has been a losers game for a year and a half now.
Dear Anonymous
ReplyDeleteWho has been calling for a correction for a year and half? Not me. Not Terry Laundry.
If you follow T Theory, Terry Laundry would have kept you in the up trend that started in March of 2009. While others were calling it a bear market rally that was sure to fail any day, Terry recognized it for what it was: a new bull market.
As background, beginning around 2004-05 Terry's theory called for a top in the stock market in September of 2007 based on a cycle that began in 1998. The actual top came in October 2007.
Terry suggested that the current up trend would last well into 2010 before faltering. My interpretation of his long term cycle work shows that a new downtrend will start within several days either way of November 12, 2010. My short term cycle work suggests that ~October 27 (give or take a couple of days) could well be the actual top of the bull run that began in early September.
For more information, I suggest watching the T12 and T13 videos I made.
As for your belief that the stock market will NEVER go down again, this attitude reflects the very type of complacency that can lead to a significant correction.
thank you for the comment I will go back and look at some of the postings.
ReplyDeleteAny idea how deep a low we are going to have, I understand mid December is terry's nulled echo low. That's only a month of declines. And then we start a new uptrend? Hardly much of a bear market if we are talking depression.
The nulled echo low is just a projected cycle low, not the end of the downtrend.
ReplyDeleteAs for the length of the next cycle, it's undetermined at this point. Looking back at T1-12, there are some very short Ts (T4-6, T8, T10-11). All of these, however, came during the 1980-2000 20-year up cycle.
Thanks to Terry Laundry link I discovered your blog: great and hard work here. To add on the ending expanding pattern on the SP I also noticed a very unusual thing in that ALL volume indicators are diverging. The PVT (price volume trend) is here plotted along with prices and on this one a divergence is usually very reliable.
ReplyDeletehttp://screencast.com/t/y95LaBlm3H
Further, I also noticed a all time high reading on Nasdaq market sentiment: you will notice that once this indicator reverses (even from much lower level) it never looks back and so does the ensuing correction which in all cases was at least 18% (April2010).
http://screencast.com/t/6dKO2JprSCvP
Please keep on this blog!
Carl
Thanks for the kind words and those charts, Carl. Very interesting.
ReplyDeleteI will continue to say it- this market is not going down, volume divergences, megaphone patterns, they are really meaningless. The Fed is controlling asset prices, and as long as they do, stocks will scream higher. Get on board!
ReplyDeleteI really enjoy reading the blog, great work. It's unfortunate that these indicators just don't work anymore. Cycles that invert? It's impossible to make money on a cycle high that turns into a low. Fun reading though!
History repeats?
ReplyDeleteThere seems to be a fractal in the market action of the ‘70’s and now. Its pretty easy to see; compare Oct 2007 to Jan 1973, March 2009 to Nov 1974. Right now price is getting very tired much like Jan- March 1976. I also saw that Terry had a similar pattern in one of his oscillators on a chart this past weekend.
The price may just trade sideway around 10,000 like we did at 1,000 (and 100 before that). Then we take off leaving the bears behind (prices can rally due to inflation and global weakness and not necessarily a strong domestic economy, it all depends on money flow and velocity)
The Fed will do everything they can to avoid a double dip, (actually I don’t think we are out of the first one) but what I think, what the Feds think or do, what the comparison to 1976 may or may not be, what Terry thinks about a coming depression or what Parker thinks doesn’t matter.
All that matters is price.
The fractal, Terry and Parker all point out possibilities of future events in price. Its our job as traders to listen to this wisdom but let price action tells us if we (they) are right or wrong… then act on that information.
I learned this lesson the hard way by following Bob Prechter for many years.
“Know the possibilities but only allow price to tell you when to act.” – Tim Mack
I totally agree- price is paramount. I mean for example- the bears are getting titillated because we closed near the bottom boundary of a trend channel?
ReplyDeleteC'mon. We are 10 points from the recent s+p High, a move that has travelled 186 points since July 1. Let's get some perspective here folks.
It gets funnier and funnier as I watch people try and call the top of this market, meanwhile it's actually been picking up steam. Oh wait oh wait today might be the high. Oh. No. It's tomorrow I promise. Cmon.
This Is not a knock on this blog, this blog is actually very good, with some thoughtful posts and commentary.
See you tomorrow, and I'll be wearing green. Lol.
"It gets funnier and funnier as I watch people try and call the top of this market, meanwhile it's actually been picking up steam. Oh wait oh wait today might be the high. Oh. No. It's tomorrow I promise. Cmon."
ReplyDeleteAll viewpoints are welcome here as long as everyone respects each other and offers justification for their opinions.
"I am bullish because XYZ" is fine.
"I am bearish and the bulls are idiots at whom I laugh" is pushing it.
I have the ability to delete offensive comments, but I'd rather not have to use it.
In the words of Ron Bugandy, "Stay classy, San Diego!"