I see everyone is excited about this great move back to “new highs” and ready to jump back in with both feet. Well, not everyone. Not you, of course. But everyone else. I figure I should put the recent market move into perspective.
Looking back to 2000, price is not even close to a 50% retrace. Price is not even back to the 2007 high (over even near it). There has been a nice swing off the March lows but I want to see a swing lower and then a resumption of the trend higher before I buy into the market at these levels.
The weekly swing chart does show a counter trend in June but this move has lasted over 210 days. I am not going near the long side until another swing low.
The range from 1982 t0 the 2000 bubble high was retraced at the 50% time cycle. A bounce back to the angle of the 2007 high is about 7% higher. The market will do what it wants, but my bet is that it won’t make it through this angle on the first attempt.
Next week concludes 104 weeks off the 2007 top and is a place I am watching for a market rollover. The bullish case will be a 90 day swing down that remains above the March low.
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Tags: Gann Square · Market Outlook · Nasdaq Charts (IXIC)3 Comments
Andy,
You seem to have as good a read on the market as anyone, with one advantage, Ecclesiastes. I just re-read some of it and it again puts everything in prespective. The now, the moment, the most simple and valuable and precious things do not involve a chasing after money, as EVERYTHING is vanity, but a poor man’s wisdom is despised, and man perishes for a lack of knowledge, in every aspect of his life. We both will make money because, knowledge is power, and it is good to know you can provide for your loved ones, with constant vigilance, and keeping everything in perspective. Everyone is expecting a big drop in the stockmarket..but it may catch all of us unawares, as it could result, not out of technical indicators, but through an immediate world catastrophe, in some part of the world. I now seem to favor being in and out of the market at the end of the day, with Berkshire Hathaway as the best “mutual fund” stock, but that too will plummet if Berkshire dies or the rest of the market takes a tumble. What a crazy world we live in. Such a struggle to amass security, and then find how unsecure it really is…..brings me back to Ecclesiastes. Eat, drink and be merry and enjoy the precious moments of life. Neil Adams
Andy
Thanks for all the great work. I sold all trading shares about two weeks ago and about a week ago started buying QID as a hedge. I still own apple that I bought almost a year ago. With earnings tonight I continue to hedge thinking it will take the sting out of a drop in apple shares which of course could happen even with good earnings. With a cost basis of around 100 I would love to just LTBH here and just trade with the remainder of my funds. Any thoughts?
Robert
Robert – I put a post up on AAPL for the morning. Congrats on your smart investing. As always, I have no advice for anyone. I have enough trouble figuring out what I am going to do.