For readers within driving range of San Francisco the finest technical analysis society in the country, and the oldest (tsaasf.org) meets monthly at Golden Gate University. Last Thursday the society met and discussed both Wyckoff and the state of the market. Do they know what’s going to happen? No, but neither does anyone else.
But we know.
What??!! Should you distrust us? Always. Well, not distrust us, because unlike most of the participants in the market we have our readers’ best interests at heart. But read our comments with a skeptical eye and use your own judgment and analytical intelligence.
Here’s what we know and how we know it. What we know is an edwards & magee truism. The present trend tends to continue. Let’s say that again. The present trend tends to continue.
The present trend is sideways, and the present trading posture, to exploit it, is a trading posture. If you’re not short term trading you should be hedged or out.
Druckenmiller (famous manager) Pellegrini (famous trader who hit it lucky in the real estate crash (yes, lucky) both are biting the dust (did you know that the term is straight from Homer, the Iliad?, not from Cint Eastwood.) What does that tell you? Tough trading out there. Goldman admitted its traders were eating dust. The theme is short term trading — sometimes 5-9 days. We think only the lucky, the quick and the idiot savants make money in these markets.
Some readers may remember that it was ourselves who caused all this chaos and turbulence with our famous prediction that the S&P was going to 1565. Well, we didn’t say when, and besides that, that’s our story and we’re sticking to it. But first we have to wipe out all the undeserving and unworthy who were making too much money, and we have to scare everybody to death (we’ve almost done that) and bore to death all the ones we didn’t scare to death. Just as soon as we’ve done that we can start the bull market game again.
So, now for more fearless predictions. Sideways market continues into October, when, on October 19 market puts on horror show crash and just as soon as the lambs throw in their cards we take the market up again. Isn’t this a wonderful country? Don’t you love this game better than anything except the Super Bowl? We do.
We are not point and figure experts but we have gotten more and more interested and we share the following chart for what it’s worth. Only time will tell its worth.
According to the p&f guys this predicts a target of 9750. Do we believe it? We don’t believe anything. We just observe and compute technical stops. What is interesting about this chart is that it does show something that looks like a head and shoulders as well as a sideways broadening pattern.
In the near future we will be looking at some strategies which make money while Washington burns.
And remember what Mark Twain famously said: Americans are by nature an open, gregarious and honest people, and our only native breed of criminal is the congressman.