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An Update On The Scenarios
richard
blog
Woohoo! It looks like I’ll be going to the Vancouver 2010 Winter Olympics…I requested some tickets to the gold and semi-final hockey match ups. Anyways, my original plan was to post after October 22, 2008 but seeing as we’re past “point b” I’ve decided to give you a little update. Firstly, please skim through my last post before reading this one.
Take a quick peek at where we are in the markets:
Now take a look at the three scenarios I proposed in my last post and tell me which scenario we are in:
It is still hard to identify which scenario we are in but it sure looks like the “green” one. We retraced 40% hitting our heads at 1000 before dropping back down to 900. However, it is important to note that “wave b” peaked on Oct 14 instead of my predicted Oct 22, 2008, so things are moving much faster than I expected them to. Big moves to the upside or the downside seem to be regular events in this current marketplace. The 900 point retracement in the Dow was expected, but I sure didn’t expect us to fill that 900 point gap in one day!
I’m bringing this chart back to your attention again because of the trend-lines I drew. Monday will be an important day in the markets, if we close above 1000 in the S&P 500 a double bottom formation would arise…this should lead to another bullish run. So if we get a higher high we’re off the races…but then again, if we get a lower low there’s a high probability that we will be continuing down. We might stop at 900 (”green scenario”) but we could also follow the trend-lines and head south to 830.
Extension-updated on October 20, 2008: Nice, we got the breakout we needed…we busted through resistance today.
This is all good and all but we have yet to pass 1000, and today’s action occurred on light volume. For this reason, I would be skeptical but this is no reason to sell short. A short-term bottom looks to have been formed and we should head higher from here, but only time will tell. For the time being, leave me with your comments on the markets…I would love to hear them!
Richard
richard[at]hedgeagainstspeculation.com
October 20th, 2008 at 3:57 am
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October 20th, 2008 at 3:25 pm
Well no stop above 1000 for the spx on monday. Financial sector bkx also could not break through resistance. Seems tomorrow will be important day.
If it doesn’t break through resistance tomorrow it will go further down i think.
BTW, read this “Welcome to the world of deflation”. http://www.minyanville.com/articles/lehman-LEH-fre-fnm-aig-ms/index/a/19213
Nice read!
October 21st, 2008 at 2:25 pm
Nice article. Thanks.
Eugene
October 22nd, 2008 at 1:02 am
Hello Richard, any views on tuesday octobers 21 action for spx? Grtz
October 22nd, 2008 at 9:14 am
Peter, thanks for the article it was a good read
As for Tuesday`s action, we were above the trendline, so the trendline was still acting as support, unless we close below the trendline today, we should technically still be heading higher. Closing below 930 in the S&P 500 will not be a good sign.
October 22nd, 2008 at 4:57 pm
Yup and it broke support: 896 points.
October 22nd, 2008 at 5:52 pm
Great posts, very informative. Thanks for the updates.
October 22nd, 2008 at 10:08 pm
We did break support today, we should’ve closed much lower than 896 but rallied at the end of the day. It is interesting to note that today’s volume was relatively light. We sold off on light volume but ended the day to the upside on larger volume…will we follow through to the upside tomorrow? Perhaps…but more downside is likely.
October 23rd, 2008 at 12:55 am
Think a retest of the lows from 1 1/2 weeks ago may happen soon.
October 24th, 2008 at 3:52 am
European markets down almost 10%. Oil dropped till 64$.
Glad i’m in puts
October 25th, 2008 at 8:55 am
Ya, those futures dropped a ton, eh? I didn’t get a chance to trade on Fri…it’s been a busy week for me, I’ll be out all day today as well, but I’ll take a look at the markets on Sunday and see what I can post then.
Thanks for all these comments btw Peter…let me know if you ever wanted to be a guest writer on H.A.S.
October 25th, 2008 at 2:17 pm
Hello Richard, thanks for your support. Well i finally started to write my insights on the market as well. You can check them on http://marketopportunism.blogspot.com/
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