Every body take a deep breath and say OM. Experiencing it last week had a bizarre feeling highlighted by our frenetic efforts to hedge our CANE&M positions so we could make CANGX look bad. (Harmless jokes — don’t take anything we say seriously.) (It’s the mutual fund industry we want to make look bad.)
Thursday and Friday felt downright weird — a 210 point upday cancelled the next morning by a 277 point downday. The last 9 months have had enough weirdness for a lifetime and readers who are young enough to be around for awhile should savor the experience. Like the grandkids saying, Jeez Granddad not only survived the crash of ’87 he made money on it.
We think that Thursday and Friday not only felt weird, but were weird, and may be the harbinger of more to come. The 10 day intraday (30 minute) pattern is nothing but downtrend. NOTE: What is missing in the news about Friday’s action? That we have seen nobody has come forward with a reason for it. Very Strange. Is this the pundit that didn’t bark in the night?
As for where we are readers could probably parrot back like good students exactly where we are from our letters over the past month. We are between the 10/2 low and the 10/21 high in a down wave that we have jokingly called the flush. Previous occurrences of this flush have been ended by a power bar down (like Friday’s).
Readers should be aware that when the market gives you something — a pattern, a setup — four or five times in a row that it will kick the stuffings out of you with a variation on the pattern the sixth time.
Now, since we are between high and low poised long term investors are waiting for one or the other to be taken out. Since we are in a down wave it is the low we are observing, since it is the Basing Point. Ordinarily our stop would be 5% under that point. (That is standard. We may reconsider this percentage over the next week and if so will post a changed analysis immediately.)
At any rate if this Basing Point stop is taken out it will put us short again.
Remember. You can avoid heart ache, heart burn and psoriasis by taking the long term view.