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A 38.2% retracement would take us to 1045 on the cash SPX. Any better downside forecasts out there?
>>> eadamy@xxxxxxxxxx 10/17/01 07:34PM >>>
My short term view is now less bullish than it was. The move met my criteria
time wise (18th +-) but not price wise as I expected it to move closer to
1150. Essentially most of the time allotted to the second leg of the rally
up was spent going mostly sideways. The move down is now of crucial
importance to see if we get a satisfactory secondary low or a complete
failure. I will note that the inability of price to move up to the target
has negative implications for the move down. One must keep in mind that a
bear market is a bear market until proven otherwise so I remain bearish but
open to the possibility of a secondary low which could sustain a rally.
Earl
----- Original Message -----
From: "Steve Walker" <Steve@xxxxxxxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>; <eadamy@xxxxxxxxxx>
Sent: Wednesday, October 17, 2001 3:04 PM
Subject: Re: [RT] Markets bullish (short term view)
Earl.....did the move this morning meet your updide criteria and are we now
headed for the secondary low?
Steve
>>> eadamy@xxxxxxxxxx 10/14/01 07:47AM >>>
I believe that the market is sending clear signals that it intends to
continue moving up. There were two very important psychological tests this
past week which should not be ignored:
1) the anthrax scare on Friday was good for only a quick short and then only
if one did not blink
2) the market closed near the high end of the consolidation range on Friday
in spite of prospects for bad news on the terrorism front over the weekend
Pretty much across the board, my Advanced Get index charts are showing a W.4
rally which has been so strong that the probability for a lower low in W.5
are quite low. Further, most of the major indexes have been moving up in
nice, albeit steep, regression channels. This combination suggests that the
next leg down is most likely to establish a secondary low from which another
rally will occur. I still have not filled in the holes in my breadth charts
from my absence so I don't have a reading there, however spot observation of
daily a/d volumes for the past 10 days suggests that there has been more
accumulation than distribution, especially in the NYSE stocks. Further, some
cup and handle patterns are beginning to appear in hourly charts. Absent
another calamity, I still see a move to S&P500 1150+-, perhaps by the 18th,
followed by a correction to establish a secondary low.
Anyone who has read my posts here knows that my long term picture is as
bearish as it gets. I am not seeing the beginning of a new bull market. What
I am seeing is a picture which may be consistent with the fiscal and
monetary stimulus which has been poured on the markets. As such, this may
provide some good opportunities on the long side for nimble traders.
Earl
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