For the S&P the 840/850 must hold. If not, then 818 (lower low from last Thursday)is the final straw. After that the monthly low of 768 from Oct 2002 is the next stop and after that we're really screwed with 600 to 650 being the nearest support from way back in 1996. About the only positive is that the monthly RSI on the S&P is at 12.75 and that's the lowest it's been in 30 years!!!!! On the other hand you have a double-top on the S&P monthly (March 2001 at 1552 and October 2007 at 1576, close enough) and that is a very strong chart pattern which is still playing out. If this is a true double-top then we will very likely see the S&P bottom somewhere between 600 and 700.
Hennie? Are you sitting down boet? The monthly pivot low for the FTSE is at 3277 (March 2003) and the FTSE also has an (almost, probably) double top on the monthly chart formed by (Dec 1999 at 6950 and July 2007 at 6754). However, definite double top for July 2007 at 6754 and October 2007 at 6751.
You Know You are a Permabear When. Each time the market rallies, you declare it an "unhealthy sign of speculative excess" The great majority of chart patterns always appear to be either rallies in a bear market or an imminent major top. Sideways moves are actually just "setting up the market for the next down leg" All the anecdotal evidence you see reveals excessive bullishness; You have trouble sleeping when you take a long trade. The move from Dow 7,000 to Dow 11,000 has "just been short covering" Your website links to Marc Faber (The Gloom, Boom & Doom Report), Any 10% rise in an stock is a "great shorting opportunity;" You blame market rallies on ignorant bulls "who just don't understand;" You short anything that is in your parents' retirement portfolio - and are determined to outperform. The market declines to zero - and you're still bearish.
Priceless Divz! You actually got me worried about my sanity. Anyway, whoowee what a day the S&P had yesterday. Finally, some good news in that the US markets actually maintained their support despite Paulson's bumbling and stumbling and in my book that is actually quite a bullish sign. But the DOW must top 10100 and the S&P 1000 before we're out of the consolidation. But today I think will be nice and green!
Brillian divz! Must say though, without a resident perma-bear the forum gets very dull. And Nova is one of the best there is, no question. He has every obscure fact and figure at his fingertips - not many as gifted as he.
Good for you. Keep digging away as it brings a nice balance to differing opinions and provides good entertainment for all :-) Yep, I do tend to spout bearish crud all over the place and need to step back now and then to rebalance my view and the best way to do that is to get a verbal whipping. I love a good argument. But seriously, I'm definitely toning down my bearometer short term for three reasons:  The USD Index is toppish and overbought and  The clear defence of support bases in the US markets are both strong signals (for me) that we could be in for a sustained rally and  the markets simply shrugged off the TARP testimony yesterday despite it having being an embarrassment of epic proportions for the US. The clear market turn signal for me will be if/when the EURUSD breaks through 1.28 and sustains a rally back above 1.3035 and knocks back through it's 21 day MA. In that scenario we will rally like there's no tomorrow because a weaker USD will lift commodity prices. Any opinions?
Yeah, G20 outcome was meaningless. Interpretation politicians are no longer worried and think situation is in hand. This may or may not be the case. The conclusion that the market "may" reach is that all is OK, and the support will hold. So.. up we go for a nice rally of 20% or so. Then all bets are off and we may go down in flames..
Brazen, your gut could just be right but it's a bit early. If you want a no BS way to get a clear leading signal for when a rally is going to start then keep your eye on the EURUSD. I been trading it for years and it's seldom failed as a lead indicator. Here's how: USD Index is overbought and due for a correction (that's the setup). EURUSD is in a symetrical triangle on the daily chart and a breakout is imminent (next two or three days). If the breakout is to the upside then both the linear regression and the triangle is at 1.2720. If EURUSD goes through this level we will have the start of a rally. If the 21 day EMA is penetrated at 1.2826 then the rally will get steam and if the upper bollie is penetrated at 1.3035 then we're going to see one seriously PO'd bull come roaring out of the abbatoir. Here's my reasoning. At this time Dollar weakness = Bullish market. The only 'vlieg in die sop' is if FX names and sovereigns again intervene to strengthen the ZAR to keep the Rand price of commodities stable. USDZAR is consolidating inside a flag which is also an indicator that a break is imminent. Upside is R11.80 and downside is R9.30 to 8.90)A weaker USD and the ZAR at current levels or weaker will guarantee that the USD prices of commodities go up in USD and ZAR terms and we'll have a mega rally. A weaker USD and stronger ZAR and we fade any rally and all bets are off. So keep an eye on EURUSD and USDZAR as I'm pretty certain they'll tell us clearly where we're going before we go there.