Here is a one box, 10 point box, reversal chart of the cash S&P 500. At times like these, when everone about you seems to be loosing their heads in panic, a look at a point and figure chart like this can be an antidote to unreasonable bearishness.
On this chart I see two potential bases that could support substantial upmoves. I emphasize the word potential because neither base will be completed until we reach higher prices.
The base whose width is shown by the red line will be completed when the S&P reaches the 1270 level. If this should happen, and I think it will soon, the count across the base projects a move up to the 1380 level (red dot).
But a move to 1380 would complete the second base which began building in July, 2008. If this larger second base is completed, its width projects a move up to 1700.
Food for thought and and indication of this market's upside potential once the gloom starts to lift.
13 comments:
Follow up on my prediction: I am expecting DJIA to be around 12000 by the close on Monday, October 6.
"Doc"
Stop and reverse out of my short. Now long from 1218.50. Basically gave away this morning's gains.
EDS
Carl,
Thanks for much for all of your work. I held on to my SPY long from 114 last week based partly on your outlook and I hope to ride it up for a while. (I must admit that I did have some stomach churning moments the last couple of days, though.)
Best regards,
Sam
1700 by when? If you mean by end of year you really have lost your crackers.
Out at 1224. Reverse back to short
EDS
This pretty much sums it up~
http://www.youtube.com/watch?v=8xTTWHMCXdg
Covered short at 1220. Reversed back to long
EDS
a long series of large size bond futures buys at the offer gave a nice signal to go short near the top near 1:48pm
Solrac
Carl
great chart.
From the chart what appear to be clear is the 1220 level may provide a day or two of resistance.
It is just too important a level but once achieved and back tested it should act as support.
The bailout clearly hangs over the market here and it strikes me that whereever we are price wise, this will get sold pretty good once the market completes its bounce up.
Good luck with your trades and appreciate all your posts.
steve
Added to long position at 1212.
Stop below 1206
EDS
Dumped half the position at 1220. Stop below 1210 on the balance
EDS
Dumped the rest at 1220 on failure to break to new highs. Done for the day.
EDS
Carl ,
Myself and all my members respect the work you do and the posting of your trades win or lose. It is times like this you seperate the pros from the wannabes...I see many blogs now not showing their performance or live trades because it is the toughest market EVER tp trade and you my friend have done a wonderful job in describing when where and why .
Keep up the good work !
All of us at TTT
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