Step 1 - Setup (Complete)
Step 2 - Test (Complete)
Step 3 - Breakout (In Process)
It seems like market trend has reversed. 3rd Wave up is underway. Markets might have bottomed yesterday within the IPM window (already sent to subscribers).
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The S&P 500 has rallied from Oct. 4 and continues to rally today. I'm not sure how you calculate a further continuation of this 3 week rally as a trend change. From my point of view it seems more likely the trend change is down starting next week.
ReplyDeleteI think UST is correct. Analysts at cnbc had said the S&P will be up 10 to 13% for the year. Jim Cramer had a episode on off the charts being more bullish now. Businesses have lots of cash. Earning seasons have been some how positive. We are not Europe. The VIX has been high and steady for more than 30 day which is a sign on bottoming. And we had a almost 2% gain yesterday with a 2 month highs for the S&P by CNNMoney.
ReplyDeleteThanks Steve and Joseph for the comments. So here is my point of view: I have researched many historical patterns, one that I have found very reliable is the 8/4 test. It gave a buy signal in March 2009, generate a sell in May 2010, signaled a buy in Sept 2010, and signaled a sell in May 2010 and in July 2010. So, when this signal shows trend reversal. I do respect it. That being said, this signal also indicated a buy in late March 2010 and we continued to rally for next 1 month. So does it mean that we will make new highs ==> No (at least not now). But it does mean that there is no point in being short, when the trend is up. I have always tried to calm my nerves by saying: A trader is typically bailed out on a bad trade if he is with a trend, but if is against the trend --> he will continuously loose.
ReplyDeleteThis being said, UST will continuously look for a top if majority of people start to jump the bullish bandwagon.
care to share where to find the 8/4 test? cant find it on the web. Thanks!
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