Dow

[Phaedrus]

Ananda, I was looking back over this thread and couldn't help but notice that you were quite Bullish while the market was crashing (you sold nothing!) yet, just as soon as the market turned, you became overtly Bearish, with most every post concluding "Market Strategy: Sidelines (safest). Longterm THE BEAR". It appears that you rode the slump fully invested all the way down and that you have been fully cashed up for most all of the very strong rally that has ensued. From where I sit this looks awfully like a lose-lose strategy! You maximised your losses on the way down and have minimised any gains on the way up. As Sarah Palin said - "say it aint so". Please!

While you have been advocating sitting on the sidelines, the market has soared roughly 50%. It seems to me that you have painted yourself into a corner here. Having advised avoiding any market involvement during the biggest rally in decades, you really would be going out on a limb to advise buying now - the longer this exceptional rally continues, the higher the likelihood of a correction. I think you will be stuck with your unfortunate "sidelines" recommendation for quite some time yet!

You should have been Bearish when you were Bullish and Bullish when you were Bearish. Imagine if you had sold everything when you said "sell nothing" and bought back in when you said "This Bear has just started"!

The bluntest, crudest instrument in the TA toolbox is the 200 day Moving Average. Van Tharp said "My advice, get in the market when prices are above the 200-day moving average and get out when they are below. That would have kept you out of this market throughout 2008". Indeed. It is of course fairly easy to improve on such a simple, basic system.



Ananda, I feel a bit mean featuring your posts like this, but maybe there is something we can all learn from it.
Regards,
Phaedrus.

[ananda77]

Hi Phaedrus,

...I know that you do that and I think its funny...

Kind Regards

[Hoop]

TA's life is like a slow moving soap opera...everyday a little more of the plot is revealed

Ahh Hah.... a zig zag upturn on the 2 November. Hmmmm
Everyone has been beating the market correction drum.


Hmmm..could it be that this latest weakness is just another leg in this zigzag formation?


coming up....
will we end the year in a EW Prechter c wave crash
will we end the year on a Jim Cramer high dressed in a bathrobe (again)
will we see Nouriel Roubini exit the market & add another room to his loft

Stay tuned for the next exciting episode of...THE DOW

[Hoop]

Hmmm..could it be that this latest weakness is just another leg in this zigzag formation?We'll know soon but I'm thinking "yes".

Just too many fundimentals globally going the right way for US markets not to pick up on the back of it.

Back over the psychological 10000 ...
Belg...that "yes" looks a good bet now..eh

[Dr_Who]

Nice graph Hoop.

Keep us up to date on the TA side. I am more of a FA man and have no clue when it comes to TA.

I ve always said the market will go higher (read other posts) and bought more stock during the last week of weakness. As long as those rates are low, the market will hold.

[Nevl]

Good jumps in the Dow but the Aussie seems to be lagging despite the fundamentals. Am picking up Aussie and hoping it plays catch up. Will have my stops in this evening when the US labour figures are announced. But yeah lots of good news out lately.

May head towards 10200 by Xmas

[Hoop]

As I write the DOW closed at 10407 (+136).
The 50% Fibonacci has been breached. the primary downtrendline is under threat and the Market correction due point has been exceeded.
What is so important is that all these points are happening at this period of time and creates a large resistance for the DOW to leap over. it seems today the DOW's rise today is remarkable as it is against the chartists odds. The chartists last week were expecting a fall of the DOW index this week as they were assuming a respect of these lines and points. Even though today's rise is big and enthusiasm is abound with sideline money starting to enter the Equity market..there are still the same warning bells going off for a bull market correction to happen.

If the DOW keeps rising there is another big hurdle looming, the strong resistance line (orange 10650) created back in the previous bottoming out in 2002/2003 That resistance line is the Feb 2002 Feb 2004 necklines of that inverse H&S formation.

[Hoop]

The DOW is respecting the triple wammy..the Primary downtrend line, a resistance level and the FIB 50% extension point, all together at this point of time (see the above chart in the last post) This was always going to be a big hurdle to mount, it will be easier to break upwards later when these points shift and don't coincide together...at this moment all together they are acting as a big heavy lid which would take more than normal buying pressure to move above it.

Meanwhile.. with this big lid in place, a TA bull correction due point of 10360 market, and the ending of a double zigzag wave pattern...its time to be careful again.

PS Edit....Notice the short/medium term down trend in Volume
.

[Footsie]

Hi Hoop

as always a very informed post.

I'm starting to feel a little nervous. The market has just stretched itself too far without a good 3 month pull back/ consolidation.

i'm increasing my cash position. frist time i;ve done that since March 09

PS NZ and Aussie markets.. which is what most of us all trade HAVE NOT MADE NEW HIGHS

[Hoop]

Hi Hoop

as always a very informed post.

I'm starting to feel a little nervous. The market has just stretched itself too far without a good 3 month pull back/ consolidation.

i'm increasing my cash position. frist time i;ve done that since March 09

PS NZ and Aussie markets.. which is what most of us all trade HAVE NOT MADE NEW HIGHS

Hi Footsie
yeah corrections do make us feel insecure and can make us do emotional actions rather than the discipline/calculated actions.

Your PS quote says it all..PS NZ and Aussie markets.. which is what most of us all trade HAVE NOT MADE NEW HIGHS...
The NZX50 and All Ords seem to be already halfway through a correction which started about a month ago. Ideally... (and you had a crystal ball that works) if you had an indexed portfolio and were expecting a correction it was a month ago you should've sold. However, for most of us why sell? as Bull corrections are mild and often end without triggering medium/long term sell signals with the net result further down the track a higher market..

At present the NZX50 correction is waveless and has consistently downtrended about 4% already.. so I guess we are half way.
The All Ords had a sharper correction of 8% and has bounced to recover 6% of that..whether it is a B wave and a bigger drop (c wave) is coming is not clear...some charting indicators (Ichimoku) suggest it could be forming a triangle/pennant (higher low lower high) we have to wait and see.

Disc:- 90% equities 10% cash.