The bear market rally is now done - Monday starts another downtrend - see attached
- Thread starter Port1385
- Start date
Interesting article:
The Big Picture:
Resist the urge to jump into this sick market. Anyone looking at 2008's near 40% decline will feel tempted to jump in at these bargain-basement levels. If you reference the year 1930, (one year after the start of The Great Depression) you may think twice. Despite all the fiscal and monetary stimulus being thrown at our economic mess, the US, and the world economies will look a lot like they did in 2008.
Political and Economic Predictions:
- Oil falls into a range of $20-$30 where it settles for a short period. Be on the lookout for a complete collapse of Russian and Venezuelan economies as they cannot exist on such a low oil price. Expect military conflicts to ensue around the world, which will raise the price of oil somewhere between $45 and $85 by year end (depending on severity of conflicts).
- Eastern Europe's massive debt loads and Western Europe's over consumption, and economic infighting cause massive upheaval within the EU. Expect European banks to rapidly erode, followed by the fall of the Euro, and maybe some major EU partners pulling out of the EU, or at least pulling out of the Euro.
- Global recession continues. Talk of resisting isolationism is overcome by reality. Isolationism and protectionism accelerate global recession, causing commodities to continue the path of deflation. Talk of hyperinflation will be prevalent in 2009, but will not be seen until 2010 or later.
- Hedge fund industry (with massive amounts of cash on hand, ready to move back into the market) cannot save the economy. Calls for new regulation, and inability to make profits under the current "2-and-20" high watermark standard leads to massive hedge fund closings. We have only seen the tip of the iceberg on this one.
- Gold ultimately trades higher. I expect gold to waffle around its current price in the near-term, with a possible trend to the downside (due to commodity deflation), followed by a year-end rally (flight to safety) that closes out above $1000/oz.
- 2007 was the subprime crisis, 2008 was the credit crisis, 2009 will be the consumer crisis. Unemployment will hit double digits (maybe not until 2010), housing markets will continue to fall, consumer defaults on mortgages, credit cards, and student loans will explode. Expect retail, and automakers to continue to struggle. China's economy will continue to falter (at a more rapid pace) due to the falling US consumer demand. Tech stocks finally take a long-overdue beating.
- Despite attempts to lower mortgage rates to 4%, the move will fail to kick start the housing market. Refinancing will balloon, leading to a further split between the "haves and the have-nots."
Nine Ways to Profit from 2009
http://themonthlystock.blogspot.com/2009/01/nine-ways-to-profit-from-2009.html
The Big Picture:
Resist the urge to jump into this sick market. Anyone looking at 2008's near 40% decline will feel tempted to jump in at these bargain-basement levels. If you reference the year 1930, (one year after the start of The Great Depression) you may think twice. Despite all the fiscal and monetary stimulus being thrown at our economic mess, the US, and the world economies will look a lot like they did in 2008.
Political and Economic Predictions:
- Oil falls into a range of $20-$30 where it settles for a short period. Be on the lookout for a complete collapse of Russian and Venezuelan economies as they cannot exist on such a low oil price. Expect military conflicts to ensue around the world, which will raise the price of oil somewhere between $45 and $85 by year end (depending on severity of conflicts).
- Eastern Europe's massive debt loads and Western Europe's over consumption, and economic infighting cause massive upheaval within the EU. Expect European banks to rapidly erode, followed by the fall of the Euro, and maybe some major EU partners pulling out of the EU, or at least pulling out of the Euro.
- Global recession continues. Talk of resisting isolationism is overcome by reality. Isolationism and protectionism accelerate global recession, causing commodities to continue the path of deflation. Talk of hyperinflation will be prevalent in 2009, but will not be seen until 2010 or later.
- Hedge fund industry (with massive amounts of cash on hand, ready to move back into the market) cannot save the economy. Calls for new regulation, and inability to make profits under the current "2-and-20" high watermark standard leads to massive hedge fund closings. We have only seen the tip of the iceberg on this one.
- Gold ultimately trades higher. I expect gold to waffle around its current price in the near-term, with a possible trend to the downside (due to commodity deflation), followed by a year-end rally (flight to safety) that closes out above $1000/oz.
- 2007 was the subprime crisis, 2008 was the credit crisis, 2009 will be the consumer crisis. Unemployment will hit double digits (maybe not until 2010), housing markets will continue to fall, consumer defaults on mortgages, credit cards, and student loans will explode. Expect retail, and automakers to continue to struggle. China's economy will continue to falter (at a more rapid pace) due to the falling US consumer demand. Tech stocks finally take a long-overdue beating.
- Despite attempts to lower mortgage rates to 4%, the move will fail to kick start the housing market. Refinancing will balloon, leading to a further split between the "haves and the have-nots."
Nine Ways to Profit from 2009
http://themonthlystock.blogspot.com/2009/01/nine-ways-to-profit-from-2009.html
the market could retest the lows but it doesnt have to. ta is not a flight plan its a road map. there are many different roads we could travel to get to the destination.
At what point per TA is it okay to stop testing the lows? When is that arguement wrong?
As long as we go lower it is bear and we retest the lows is just definition. I think there is some latin phrase to explain this.
I do not know which way we go. I am not betting either way. The meat is in the middle, no need to catch first or last move.
As long as we go lower it is bear and we retest the lows is just definition. I think there is some latin phrase to explain this.
I do not know which way we go. I am not betting either way. The meat is in the middle, no need to catch first or last move.
See attached. We've already retested, successfully, IMO, the multi-year lows, and established a trading range. Notice that the RSI for the test is higher - notice the slight uptrend to the red line between the two circles in the RSI display. This makes it far more likely, IMO, that we are now in the process of bouncing off the bottom of the range, rather than slumping towards it.
What this past year or so did was to define the top and the bottom of the range. For now, we get to trade within that range for a nice, long time.
What this past year or so did was to define the top and the bottom of the range. For now, we get to trade within that range for a nice, long time.
A typical re-test of the lows usually involves testing over 2-3 quarters.
Examples:
1974
1987
2002-2003
There are so many examples out there, you can find them. The market never usually bottoms with the classic "V-bottom".
Look at the chart, study that chart. The market works with simple trend-lines and technical analysis.
Is this time different?
Examples:
1974
1987
2002-2003
There are so many examples out there, you can find them. The market never usually bottoms with the classic "V-bottom".
Look at the chart, study that chart. The market works with simple trend-lines and technical analysis.
Is this time different?
Yes, I agree with your thinking - -and I really could care less whether we zoom or tank because I trade, I no longer invest.
What I've learned from Rob to do is watch for key levels on the charts and do my best to trade accordingly.
I no longer could care less if we zoom to 15k or tank to 5k on the DOW. Because as a trader, I have gotten to the point where do my best to simply trade whats in front of my face based on technical levels.........and that gap at 937.50 should be a force to be reckoned with...........if not, oh well. That's the luxury of trading!
Steve
Sure, we bounced of the prior support and could easily be in that range you mention(70's style) IF that support level holds. If you think this bear market is worse than the 2001 bear market, we will blow through 750 and test the next support level. Personally, I think this bear market is much more sinister than the one we saw in 2001.
I have 1 for starters.
In addition, your chart doesn't say anything useful. Retest of 10k may be in order
Yeah, it can still move up more before it plays it's little bottoming game. Your referring to a pattern....a pattern which will probably repeat itself.
You need to figure out HOW and WHEN it's going to repeat that pattern. Will it fall Monday on no resistance or will it spike higher and THEN fall after it reaches a stronger pivotal point. My guess....showing the recent strength, and lack of resistance at the moment (aka traders caught off-gaurd on this) we're going to go higher.