So, Has the Bear Pullback Completed?

[Kiwi 16]

Now, I never predict the market. In my trading now I use S&R + faded Fibs to buy or sell retracements with the trend. Boring and pleasantly consistent.

 

But this weekend I was looking at the long term dow and I popped the fibs on it and noticed it had reversed nicely this week off the 61.8% retrace of the big drop. And S&P was not far off the same set of numbers.

 

I had originally thought this was a bear market bounce and, based on the biggest in recent history, 1929, I thought it wouldn't last more than 9 months so Christmas came and went and I thought "either its not a bear or its longer and thus probably bigger than 1929."

 

Well to fib fans, when price retraces, you don't expect it to close solidly beyond 61.8% if it is only a retracement. So if this is only a retracement then maybe price will poke beyond last weeks highs but it shouldn't stay there long and shouldn't beat it by too much.

 

So, shall we sell in may and go away?

 

 

 

 

PS. Note that I am a strong believer in the "if there are lots of predictions of a top on ET then it will keep going up." And this weekend they seem absent. Hmmm.

 

 

 

.

[gooni 10]

PS. Note that I am a strong believer in the "if there are lots of predictions of a top on ET then it will keep going up." And this weekend they seem absent. Hmmm..

Interesting concept for an automated system ;-)

[Kiwi 16]

Agreed gooni. I note that ET is today showing zero worry.

 

So, does anything have an opinion on the basic suggestion: if these markets don't turn around this price and within a month or two then the bear is over - but this is a great point for it to resume!

 

And we even have a baby head and shoulders that broke today to point back to in a few weeks if it holds ...

Edited May 4, 2010 by Kiwi
realized their was even a nice pattern

[snowbird 10]

How about initial targets should the bear resume.

 

9000 on the Dow?... 950 on the S&P?

 

others?

 

snowbird

[Kiwi 16]

And there are people who don't get a warm feeling when they hear the word Fibonacci?

 

Sitting in Australia watching fat happy people buying flat screens with their $950 handouts I never believed that this correction had run to the end. China is going to save us (Aus is on the end of the supply chain) so all that happened was the Govt Deficit went up up up. So my target is new lows until the 20 year credit balloon is corrected.

 

But to be honest I'll trade whatever I see - targets are just a mechanism for take profits.

 

 

[SIUYA 11]

Funny how a trade error can find support

(Given everyone assumes the massive spike down over night was an error)

 

Agree China is saving Aust, I hope China has a bust of some sorts as I would like to buy some bargains around the place as part of a 20 year long term plan on the close of a crash day (20% plus). (mind you if it became like the Asian crisis of 1997 - down 20% one day, and bouncing the next I would not complain about that either!) spoke to a few bearish traders from some of the big houses last night..... they are loving it.....but now they are sitting on shorts they are itching to buy them back and lock in profits even though they are mega bearish. Let the volatility continue!