In the "for what its worth" department, we got yet another 161.8% extension from this mornings high and low. It went to 5387.5 at 14:13 which was 0.5 pts from an exact 161.8%. Maybe someone else can all the next one. Shows you're all paying attention in class.
DaddyJohn
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Hi DC... I must admit that all your previous forecasts on direction I have completely agreed with and could see the logic.. however, this time I am really struggling to see how we get back down to 4941 / 5089... the daily technicals do not give me any clues as to why this move so far back in the range should occur... I know bad news flow could drive it.. but we are not trading on this, we are using price action.. can you help us all out on this one and give some clues to your thinking..
Many thanks
dc2000
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yes thats what popped up
Is this the EU news you were referring to
dc2000
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OK after a trend pattern (5 day )we get an inverse trend pattern then a continuation of the long term trend we have had two trend patterns in a row past two weeks rare as hens teeth except when bubble building
The DOW action today was on cards after FTSE close once it broke 488 it was heading to close gap from Friday
Up until today I was looking to rally towards christmas even if it was to 5900s
Its not news to get it down I want to see its news to get it back up
dc2000
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a 5 day pattern with a down at the end one more time before rally
DaddyJohn
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Many thanks for setting this out DC.. I can start to see your logic now...but.. I have always maintained that this market is likely to make higher highs because I believe that govts and central banks are ensuring we dont get a crash.. because we will not likely pull out of another one so easily.. most crashes occur when bubbles are created that most of the world did not forsee..; the problem the world has at the moment is well known and therefore I think we will muddle through and inflation will create the need for money funds to invest in blue chips with high dividends (the new save haven) and push up commodities that will drive up shares. The move up to the recent highs was achieved without the aid of the banking sector shares, these were depressed... however, it maybe that we have now seen the low for this sector and hence any reaalocation of funds now into banking will see the indexes rocket.. all this needs now is the market to forecast a full euro style TARP and kaboom .. the rocket takes off... as for timing?? we cannot be sure.. but this maybe the start of a monster rally. Would welcome yours or any others thoughts on this.
DJ - Thanks for a good analysis.
couple of points if you could explain
- exactly same solutions have been used for the past 4 years and have not worked. More of same why will it work this time apart from temporary high sugar
- will this not worsen sovereign debt problem further
- and the currency crisis
- inflation will also affect corporate bottom line
- headline inflation may not be good for politicians
couple of points if you could explain
- exactly same solutions have been used for the past 4 years and have not worked. More of same why will it work this time apart from temporary high sugar
- will this not worsen sovereign debt problem further
- and the currency crisis
- inflation will also affect corporate bottom line
- headline inflation may not be good for politicians
DaddyJohn
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good questions Samir.. why do you say these solutions haven't worked? asset prices are up and bond yields are low therefore aiding govt deficits for the USA.
What currency crisis?? the euro will keep being propped up by the Chineses.. look at the value of the euro todate vs the US dollar.. doesnt look like a currency in crisis does it?
Inflation will help corporates if they can pass these prices on to consumers.. a 1% increase in the top line far outweighs the 1% increase in costs.
Western govts have had periods of double digit inflation many times in the past.. this is not a new thing... the gold std was dropped so western countries could inflate away debt.
The people that will suffer will be us, the citizens... we have all lived beyond our means for many many years.. we now go back to frugality.. if we don't then we leave no future for the next generation
SuddenDeath
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hi, what settings are u using on the purple bands
dc2000
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I really hope Im wrong I went through my figures about a dozen times last night 2008 didnt bother me one iota and even after may falls of the last 2 years I still remain bullish.
I am counting on the 5089 and 11022 being the lows without needing to hit the 4950s a bounce off 5089 in the next week would still be bullish for me and this is assuming no lower targets are produced before that hits
SD - if you are talking about the purple dotted bands, it is an 8 period Bolinger Band. I use that on the 5 min chart normally. The chart that I posted was a 15 minute chart, which I don't normally use. On the 1 minute chart, I always use a 12 period setting for the boly band.
As for this morning, again looks like a triangle trap. We had a false break down at 9:10am. I think they will take it back up to 5440. So far it has been a typical hump wednesday. Very indecisive. The ES has to sustain a break below 1215.25 for this to make a real move south.
dc2000
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that sounds kind of wrong
The pattern is for lower lows in to next tuesday/wednesday but yesterday a high 5520 for thursday was produced so a bounce off 401 area would be expected before the down move recomences thursday this would push completion forward into friday after next
The pattern is for lower lows in to next tuesday/wednesday but yesterday a high 5520 for thursday was produced so a bounce off 401 area would be expected before the down move recomences thursday this would push completion forward into friday after next
