Dow

[Hoop]

What Will Happen After The Year-End Rally?

Ya can't fault the logic. But will he be right?

Hi Belg
Hmmm ....seemed a credible article up until nearly the end..but... when I saw that notoriously erroneous PE Ratio chart which keeps on popping up to support a writers bear argument.. all credibility was lost

[Gee Bee]

This chart unless a giant headfake suggests we go a lot higher
inverse head and shoulders is circa 1220 on the s&p

[Corporate]

This chart unless a giant headfake suggests we go a lot higher
inverse head and shoulders is circa 1220 on the s&p

I've got a red cross?

[Hoop]

Thought you'd enjoy it,Hoop. Merry Christmas dude. Its been a great year for us contrarians.

Since end of 1999, U.S. stocks' performance has been the all-time clunker; even 1930s beat it

More statistical nonsense

Belg..a Merry Xmas 2 u 2

Yeah..statistics!!!......The secular bear cycle starting exactly at the start of a decade really has made the 2000-2009 decade figures look real bad...eh.

However down under I'm personally going to miss 2009...my best year ever. Unfortunately there will be a downside.. the tax bill

Speaking about tax...a interesting snippet on CNBC this morning..they were speaking about the American investors who recently expected a correction or worse (EW supporters?) and shorted. Now that the Equity market has not down-trended as expected, if they want to claim a this year tax loss they have to cover by 31 December, and apparently there is quite a number of these investors around.
Would this covering add enough momentum to crack that resistance zone and see another upward wave?

Edit PS....another example of how one can lose their money ...shorting in a cyclic bull market

[Phaedrus]

Its been a great year for us contrarians....

I don't think so, Belg. True contrarians look at what the herd is doing - and do the opposite. When the herd began bailing out of the market (at the big red arrow) contrarians were buying. What mugs! (There are documented examples of this right here on ST)

When the herd began re-entering the market in strength (at the big green arrow) true contrarians were selling. What mugs! (Again, there are examples of this behaviour right here on ST)

It is the market followers that have had a great year, Belg. A great 2 years, come to that.

[Phaedrus]

Load up and go long.

Belg, a contrarian seeks opportunities to buy or sell specific investments when the majority of investors appear to be doing the opposite..... ie they buy in downtrends and sell in uptrends. You can't advocate "loading up and going long" when the herd is thundering North and claim to be a contrarian!

Market Strength Indicator chart update :-

[winner69]

P's chart will still be green

Heres something from Chart of the Day .... this rally is by historicall terms almost a non event ..... a long way to go yet

Quote ..... all major market rallies of the last 110 years are plotted on today's chart. Each dot represents a major stock market rally as measured by the Dow. As today's chart illustrates, the Dow has begun a major rally 27 times over the past 110 years which equates to an average of one rally every four years. Also, most major rallies (73%) resulted in a gain of between 30% and 150% and lasted between 200 and 800 trading days -- highlighted in today's chart with a light blue shaded box. As it stands right now, the current Dow rally (hollow blue dot labeled you are here) has entered the low range of a "typical" rally and would currently be classified as both short in duration and below average in magnitude.

[Corporate]

Bad times on the DOW tonight. Down 220 (2%) points at the moment.

P, has this changed your chart from "Stay in" to "Caution"...it must be close.

[Phaedrus]

[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.

No point in a new chart..this 2 months old one I posted way back tells the story

Note:...its the distance that counts not time..... BM Correction warning point of 10350 (green dotted line) about 4% error ...not a bad error rate.

Note:- Typical BM Correction "rule of thumb" sign...by the time you realise it is a BM correction half of the correction has already happened

Watch Monday (Wall St time) for a kicker....may or may not happen.