There is not much to discuss this weekend. The financial system was saved by the US government. Paulson allowed it go all the way to the edge so he would be able to scare congress into acting. It remains unclear if congress is smart enough to do the right thing, but Paulson knows what he is doing.
On the one hand, we can say the market is acting under unusual influences and prices should be chaotic. But in fact, when we look at the charts we see price behaving as expected. As a couple of examples:
The 1:1 Gann angle from the 1982 low to the 2007 high can be used as a measurement device for the current move from the 2002 bear market low. Is it a coincidence that price is currently at exactly the slope (2002-2007 move) as it followed during the 1982-2007 run?
Dynamic chart
Price moved to the 50% retrace level on the SPX for the bull market move from 2002-2007. Price undercut this level but quickly recovered back above the 1:2 Gann angle.
Dynamic chart
On a weekly chart, price did not close below any meaningful level.
Chart courtesy of Stockcharts.com
And finally, the October 10th low projection looks better than it ever has. My guess is that price will retest the low in early to mid October.
Dynamic chart
Recap of last week’s posts:
- Reminiscences of a Stock Operator
- Another Ho-Hum Week with Little SPX Movement
- Gold at 1×2 Gann Angle
- Definitely Buyers Today
- Value Line Arithmetic Remains Above July Low
- Volatility and Highs-Lows
- The Limit as “X” Approaches Infinity
- Apple Computer Visits the 50/50 Point
- SPX 1170ish is Natural Resistence
- Financials Show Strength During Selloff
- Morning Market Thoughts
- Internals Looking Good So Far
- SPX 180 Days From March Low
Tags: Dow Jones Industrial Average · Gann Angle Fan · Market Outlook · Slope · Standard and Poor's 500 (S&P500)No Comments
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.