Dow sends unhappy Valentine. Read ’em and weep.

Posted on Feb 15, 2008 by .

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The big question of the moment amongst technicians is whether the low of January will be tested. Some say no, some say yes. We say that crystal ball gazing has never been anything but a way to get broken glass in your eye. We also say that from the December high a downwave pattern is developing, increasing the likelihood that the January low will be not only tested, but taken out. If the February high is taken out prices will return to the sideways pattern. Doesn’t look likely.

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Recession, reschmession, who’s got the depression?

Posted on Feb 08, 2008 by .

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As Leona Helmsley said it’s just the little people who pay taxes — and suffer in a “recession”. You will remember Keynes’ definition of a recession. It’s when your neighbor has lost his job. It’s a depression when you lose yours. (It wasn’t really Keynes. Just couldn’t remember who said it — actually it was Jeb Bush.)

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More strange synchronicity

Posted on Feb 01, 2008 by .

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Notice where the Dow bounced. Interesting, eh? Our stop took us out of the long term trade. That actually doesn’t look like such a bad position. Violating this low would be bad stuff indeed and there seems nothing to look forward to here except lots of volatility and trading markets. The question now is where is the action?

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Definition of stop: Stop the damage.

Posted on Jan 25, 2008 by .

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The reason you honor stops is so that you don’t wind up owning Enron at 1/16. You never know till later whether you did the right thing. You only know that you did the disciplined technical analysis thing. It doesn’t work every time, but it’s still the right thing to do as thousands of charts have shown. With lower lows, broken trend lines and two (at least) important short basing points the likelihood is that the Dow is headed lower. At this point all the important trend lines are broken.

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Market panics. Technicians yawn. Is it a bear market?

Posted on Jan 18, 2008 by .

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It is not necessary to predict a bear market or even to identify it in its early stages. All you need to know is what to do now, and that is indicated by the ending of the sideways pattern with solid closes below the lowest horizontal line. Holding stocks in these conditions is a good way to go broke. The tide is now running out. Visualize Enron.

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