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Hello dear friends,
It has been a sad week.
Attached are two charts of the TSE 300. One of
them is a view of the index from 1980 and the other is a view of the index over
the last couple of years. These are updates of charts which I most recently
posted last weekend. In deference to Robert Marley, I have reduced the
number of trend lines.
As can be seen from the 20 year chart the TSE
300 is close to the bottom of its trend channel covering that time span. I am
troubled by the wave count in the last wave C, especially the fact that wave (4)
rose to a higher than wave (2), perhaps courtesy of Mr. Greenspan. It is
possible that the correction waves labeled A-B-C are in fact waves 1 to 5
comprising wave A of a larger A-B-C correction which will eventually take us
well below the 20 year trend channel.
Nevertheless, the bottom of the 20 year
trend channel for the TSE 300, as of Monday at or about 6680, is close at hand
and the confluence of long term Fibonacci retracement lines at 6400 to 6340
suggests a major level of support.
I also attach two charts of INDU spanning the
period from 1980 to the present, and the last couple of years, respectively. The
bottom of the 20 year trend channel is presently at 8513 but between that level
and the level of last Monday, are several Fibonacci retracements of long-term
significance, clustered around 9200 to 9000 and the lower limits of the current
bear channel sitting around 8800.
As noted last weekend, the very long term chart
of INDU allows for the possibility that we will be in correction until the
mid-2010's. But as noted above, if this is the big one that will take us to the
(relative) levels of the 1930's, then the 20 year correction which we have just
experienced or will shortly finishing experiencing seems an appropriate point
for the big bad bear to pause.
All of which is simply, FWIW in the eye of the
beholder.
And FWIW, I intend to take long positions on
weakness this week.
Regards,
Tony
Pylypuk
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