The sky is falling. The sky is falling…well, maybe not

Posted on Feb 22, 2009 by in Letters

Whenever a low as important as the November low is taken out the consequences can be serious.  We looked at the long term chart and determined that the November low, while important, is affected by the 2002 low which we marked here as 7197.49.  The penetration of an important trendline (which these lows are) is always important, but the magnitude of the penetration is equally important.  Traders toy with the lines so generally speaking a filter should be used to determine importance.  Magee used 3%.  So this penetration is not definitive yet.  

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