Riding the waves…

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Will Goldman ever get tired of this game?  If they do, watch out.  Here’s what the wave analysis says:  Since the March bottom there was a wave up which lasted 45 days, ending 5/8/09.  In that powerful wave there were 16 down days.  This was followed by basically a sidewave of 45 days.  On 7/8/09 the present wave started and is now 21 days long and there have only been 3 down days.  During the first of these waves there was healthy profit taking and trading accounting for the down days.  The present wave up has the look of investors chasing the train that has already left the station.  (Don’t try to reproduce this analysis at home without professional supervision — it’s a gross cut at it with differing views possible of the sidewave.)

But today sellers drove the Dow down sharply, but it still rallied, finding buyers.  A day or so ago we liquidated some family holdings in 529 plans on the theory that some scaling out after the big rally was in order.  We would be very chary of joining the train chasers.  If we joined them it would be by dipping a toe in — and not a foot.

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