ES Journal Archive (2009 - 2010)
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Why Sal thinks SPX will be in a protracted bear market until 2013.
I have referred to these two indicators throughout my career for projecting super-long trends. It's what helped me become bullish in 2003. I'm sharing these with y'all for the first time (out of concern, of course) because I don't think this market will be anything like the previous bear market.
Take a look at the chart below. Although I'm showing you only the previous 20 years, this is the first time MA(100) has actually fallen in history. Even during turbulent times of the 70s, it remained either up or flat. And, finally, MA(18) crossed below MA(100) this month!
Now that's scary, no?
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<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2326556" height="600" width="800">
Click to enlarge
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I have referred to these two indicators throughout my career for projecting super-long trends. It's what helped me become bullish in 2003. I'm sharing these with y'all for the first time (out of concern, of course) because I don't think this market will be anything like the previous bear market.
Take a look at the chart below. Although I'm showing you only the previous 20 years, this is the first time MA(100) has actually fallen in history. Even during turbulent times of the 70s, it remained either up or flat. And, finally, MA(18) crossed below MA(100) this month!
Now that's scary, no?
<center>
<img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2326556" height="600" width="800">
Click to enlarge
</center>
Damn, I forgot to mention that the monthly close for $SPX is below it's 2002 low. Back in November of last year, we did manage to break below the 2002 low but ultimately closed above it. But now, we have in effect shattered the camel's back for good.
So, three major developments corroborate in my belief that we're heading lower, much lower:
(1) EMA(18) finally crossed below MA(100).
(2) MA(100) falling for the first time in its history.
(3) The monthly close is below the 2002 low.
So, three major developments corroborate in my belief that we're heading lower, much lower:
(1) EMA(18) finally crossed below MA(100).
(2) MA(100) falling for the first time in its history.
(3) The monthly close is below the 2002 low.
Sal, Thanks for the forecast. I hope your wrong in your bearish outlook. Could you tell me how you arrive at the 2013 projection?Thanks for your time .
It's just my otherwise useless 2-cents. Don't pay too much attention to it. But if we do in fact go down there, perhaps you can take me out for a drink. 
<center><img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2326696" height="600" width="800">
Click to enlarge
</center>
<center><img src="http://www.elitetrader.com/vb/attachment.php?s=&postid=2326696" height="600" width="800">
Click to enlarge
</center>
Sal , Thanks for taking the time to share your method and outlook. I think double bottom might have held if we didnt pass a stimulus package that we cant afford. Toddys and Cohibas are on me.
It is highly probable that next Friday's close will be significantly higher than this past Friday's close.
The close of each of the last two days was very close to the bottom of the day's range. Historically, this is significant, and is especially so after a prolonged decline.
I am not going to share details here as to the specific algorithm I have written (sorry), but the results indicated that the potential reward over the next five days is over 7 times (7.33, to be precise) the potential risk. This was based on buying at Friday's close.
This was backtested on the S&P ETF SPY, going all the way back to when it started trading in the early 90's. The differences (and similarities) between the cash-based etf and futures should be duly remembered.
Needless to say, my hedges are going to be lifted overnight Sunday, and a lower open should be considered as a gift.
Note that this is based on the PAST. The future may be different, of course.
The close of each of the last two days was very close to the bottom of the day's range. Historically, this is significant, and is especially so after a prolonged decline.
I am not going to share details here as to the specific algorithm I have written (sorry), but the results indicated that the potential reward over the next five days is over 7 times (7.33, to be precise) the potential risk. This was based on buying at Friday's close.
This was backtested on the S&P ETF SPY, going all the way back to when it started trading in the early 90's. The differences (and similarities) between the cash-based etf and futures should be duly remembered.
Needless to say, my hedges are going to be lifted overnight Sunday, and a lower open should be considered as a gift.
Note that this is based on the PAST. The future may be different, of course.
kind of agree with you ss,reading the sheeple,it couldnt be any more bearish,time for the wolves to come in for a fresh kill....another side note ,have the fed and all th e major banks and brokerage houses ever played poker with all the cards face up on the table before,not to mention the G7,seems like they have invented a new way to play
No kidding. However, 1 week does not make or end a bear market, or does it? BTW, I swear I heard ya spit out the same proverbial "sheeple" doctrine last October just before the market went into a tailspin. But at the time I'm sure that such a timely, albeit tragic, event also stood out to you as the next big nothing due to Uncle Sam's $700 Billion bailout.
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