Archive for March, 2009

Rocket ship? Full moon? Zombie rises from dead?

Posted on Mar 10, 2009 by WHC Bassetti.

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Lots of questions floating around.  Rocket ships generally leave earth (shooting at the moon) with an explosion.  So do rallies.  Wary of everything about this market we identify the day as a sort of doji — which candlestick analysts look at as a ideogram indicating equilibrium between buyers and sellers.  Not exactly what you want for a rally, but it may be a sign.  The signal would be stronger if the day had finished on the high.  Nonetheless we know that an upwave is overdue here and this might be the first shot.  We scaled out of some gold on the Variant 2 signal, still holding part of our position and doubled up in C which also jumped on the rocket.  We are around the full moon.  We don’t trade on astrological signals — (do we, Karnak?) but full and new moons get our attention because the loonies trade on the phases.  C’s spurt was caused by their saying that had a profit the first two months astounding everyone.  If the government changes the mark to market rule — as it should  for this market anyway –the books will look a lot better.  It’s just entries on paper anyway.  If this is a rally, and if it persists for awhile we will get a chance to see whether  this is the bottom, or just a way stop on the way down.  As always you never know till later.

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Gold cycles and recycles and roller coasters

Posted on Mar 09, 2009 by WHC Bassetti.

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We have been following the GLD with the Variant 1 of Basing Points, and in fact added on to our personal position yesterday.  We’ve made a lot in gold and been burned a lot and the jungle drums got to beating.  We wonder whether a new down cycle is starting.  When ever uncertainty enters the picture we look to our systems to aid in decision making.  Following Variant 1 we are now in a downwave which has not yet resolved itself with the formation of a Basing Point and trend followers will be gaily giving back profits to watch the establishment of the Basing Point.  

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Divination of market bottoms (crystal ball analysis)

Posted on Mar 06, 2009 by WHC Bassetti.

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First of all we are not even looking for a market bottom here.  Bottoms to bear markets like this do not form overnight.  They take months.  We are just trying to divine (divinate?) where the rally is likely to start.  We are going on 45 days of downwave now.  That is a pretty long wave.  Is there any way to know whether a rally (strong or otherwise) is likely to start.  Note this well: NO.  There is a negative indicator.  Peter Eliades just said that the Dow was going to 4000.  That probably means we are close to a bottom (irony).  When pundits start exposing their probisci to low flying eggs and making wild predictions (intended to generate attention getting traffic) but which usually result in egg on the face we perk up.  Ah! An Indicator.

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Gaps in the S&P?????

Posted on Mar 04, 2009 by WHC Bassetti.

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As if the weight of the market momentum were not heavy enough here are gaps in the S&P.  Somewhat rare if we remember, but we don’t watch the S&P that closely.  We regard it as a further bearish sign.  

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Are we there yet? Are we there yet?

Posted on Mar 04, 2009 by WHC Bassetti.

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Anyone who ever took a long car trip with little kids has heard this question to the point of madness.  Are we there yet, at the bottom in the market?  We would bet not, but we may be at a rally point.  Monday’s action had the look of a selling climax and the volume pattern looked right for an end of wave.  Of course it may just be more sideways before any definitive new direction (most probably down).  And anyway that noted analyst Barak Obama said some very wise things about the market today.  He said if you are watching it bob up and down you are going to be misled about the long term.  The weight and momentum of the market is still heavily down, even if a rally should be due.  

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