|
PureBytes Links
Trading Reference Links
|
Anybody care to have a go at picking the bottom of the current market
correction?
The Spring '97 correction started in March when the DOW crossed below
its 50-day MA at about 6840. My trendline was the same as the 50-day
MA. A month later it bottomed at 6356, a drop of 484 points, or 7%.
The 200-day MA was at 6247 that day, which is pretty close.
For the last three months, the DOW has risen so steeply that my
trendline is well above the 50-day MA. It broke my trendline at about
8060, and the 50-day MA at 7876.
If this correction goes on for one month, it will hit the 200-day MA
around Sept 8 at about 7200. That would be an 11% correction.
Note that I am calculating these percentages from where the DOW
crossed my trendline, not from the peak.
But I don't think it will last that long. (Too much money out there,
and everybody wants to buy on the dips.)
I don't have any mathematical way to judge where the DOW will find
support. (Maybe I should as Murray Math!) So I'll just take a WAG:
I think the DOW will fall further Monday, then rise some towards the
end of the week. Then a week from now it will make a double bottom
and the correction will be over. Low: 7400.
That's my opinion today, and I reserve the right to change it
tomorrow!
|