Where is the Dow & others heading in 2005?

[peterpr]

My background view of the US markets is that they - and by extension we - are heading for a collapse in the fairly near future - say 0-6 months. BUT, its lazy - and a cop-out - to allow a background view to obscure or even totally screw up solid short-term trading opportunities (missing much of the 'election rally' by seeing premature tops for example ). So, while I am still very wary of being caught long in a collapse, right now I do not think that the perma-bears and serial shorters have suffered sufficient pain for the collapse to be upon us - just yet. As TS has suggested, a severe short squeeze is likely not far away.

Thursday's close marks a 4.9% decline from the intra-day top on 7th March in 13 trading days. The previous biggest drop since the October election rally began was about 4.45% in the 18 trading days to 24th Jan. If the present decline were to go a bit further - say to the 200dma at 10378, that would be a decline of 5.4% and a whisker away from the year's low. Stochastic is at historic o'sold; MACD and RSI - interesting. Still show downward momentum but clearly flattening - The orange vertical lines show similar lows in this 6 month rally.

Discounting the possibilty of 'the collapse being upon us' to the extent of a 60 point or so rigid stop, I reckon a long from here ought to be good for a .25 retrace, which is 80 points above the 200 DMA illustrated and 120 points above Wednesday's intra-day low. More likely we'll see .382 - .5 retrace IMHO - making for 150 - 200 points, or more.

Note - this is NOT trading advice - as always, it's just a self-indulgent excercise in getting my own inner ramblings into a semblance of order.

 

[RUDEBOY]

To be honest Tradesmart i think a lot of investors where expecting the whipsaw action judging by the amount of volume that went into the first move.

 

[roguetrader]

So, while I am still very wary of being caught long in a collapse, right now I do not think that the perma-bears and serial shorters have suffered sufficient pain for the collapse to be upon us - just yet. As TS has suggested, a severe short squeeze is likely not far away.

Peterpr, and TS, would have to agree with both of you on that view this has been a fairly brutal decline so far, it will be interesting to see how the market decides to play this one out since the Naz comp and SOX are already at the point one would have expected a bounce from, 200 day sma, whilst one would expect a little more decline in the SPX and INDU. Most everybody now is watching the 1163 level on the SPX which marked the top in early '04 and the end to the January decline this year. I would not be surprised to see those taken out all be it breifly, to put in a false breakdown similar to the false breakout. But as always, trade what you see, not what you think. Quite a bit of data out this week, which should give the market something to key off.

 

[spunkyblonde]

the dow cant rise forever it has to correct sometime ... this bull market has gone longer than most thought it would.i see the prob with the usa car maker general motors 300 us billion debt .. mAYBE A typical shock typew of thing that may happen at topf market cycles

 

[hornblower]

the dow has reached a key level of 442, will it return to the 800 level ?, or down to 9900 and down to 9689,
In the us interest rates are going to go up, so I think that long term ,the dow is going to go down
But I only trade what I see on the day
good luck
hornblower

 

[spunkyblonde]

hi ..the SPX ceartainly has dropped .. if it falls thu the support levels of a cuppla months ago it may ..fall in dramatic fashion

 

[spunkyblonde]

hey thanks mm1... m8 ..i read your post to peter in managed funds room .. it was kool

 

[roguetrader]

Volume coming in lighter than Thursday at the moment on both NYSE and Naz

 

[kriesau]

Dow is trying to overcome resistance at 10500. So far today it has had 7 attempts to breach this resistance level and has failed on each occasion. Eighth attempt in progress.

 

[twiggytwo]

Hi all, I think ,
The Dow needs to close above 10,565 for the down trend to be over
I think we may have seen a consolidation area of 28 points 10470 to 10442
I have closed my short on the Dow and have taken 333 points profit I will now wait to see todays close
I think it may be 10,497.
This is just my view not trading advice to anyone.
Regards and the best of luck to all on this thread

 

[justyn]

Hi everyone,

I notice the market opened at 15:30 today not 14:30 obviously due to the change to BST. Is this a permanent thing until the end of summer or due the clocks change over there as well?

 

[gmca686]

The USA will go forward one hour on 3rd April, re-establishing the 1430 start time.
regards, G. McA

 

[spunkyblonde]

thanks mm1 rougetrader and everyone else ,,i see 1192 as key piont on spx currently ...volatility will provide opportunity ... there is a current overnight rish more prevsalant than normal atm ....asa per chart buyers seem uncommitted ... and selllers seem to be active .almost committed but not in agressive style yet .. dependant on spx 1192 area ..of course .. this breakthu may change/confirm ./the bear outlook more than pressent oppion ...sally

 

[justyn]

The USA will go forward one hour on 3rd April, re-establishing the 1430 start time.
regards, G. McA

Thanks very much!

 

[kriesau]

Hi all, I think ,
The Dow needs to close above 10,565 for the down trend to be over
I think we may have seen a consolidation area of 28 points 10470 to 10442
I have closed my short on the Dow and have taken 333 points profit I will now wait to see todays close
I think it may be 10,497.
This is just my view not trading advice to anyone.
Regards and the best of luck to all on this thread

..........................................................................................................................................................................
Great call closing your short there as a likely upswing is now in progress. I closed my short at 10449 this morning before the market opened. However the Dow will need to break 10550 if we are going to see a short term bull run back up to 10650 - 700. I don't think this will happen especially since this is a quiet week with not much economic news due.
The most likely scenario is that it will swing about in the 10490 - 10530 range and then resume a downward path to 10350 - 60. I'm putting in a stop short order at 10475 hoping to pick up another 100 points later in the week.
I agree with the general sentiment that the Dow is in a downtrend and that we are more likely to see 10200 than 10800. I guess major influences will be oil and the size of the next interest rate increase. Good luck to all on this thread

 

[vocalist]

Mmmmmm,me thinks is a big week mate.Jobs data out on Friday, unless i'm very much mistaken.That will be a real market mover.

 

[Racer]

I agree with the general sentiment that the Dow is in a downtrend and that we are more likely to see 10200 than 10800.

That would be nice for starters.. match my Nasdaq short that I have held for a while now

 

[counter_violent]

Another relative new low, knife still falling, it's not a doom and gloom sentiment , it's reality !!!

 

[roguetrader]

SPX finding some support as it nears the closely watched 1163 level, INDU still got some room to move, volumes coming in ahead of yesterday.

 

[roguetrader]

The question I am now left wondering, and I throw this out to all you longer term players, with the year low so closely watched and us getting so close to it would you not have offloaded all your short positions or at least the bulk of them, and if so what would be left to generatea short squeeze. Food for thought