Not yet believers– but avid analyzers

As we have said belief is a bad thing to have in the markets. As the markets went to the October high legions of analysts refused to believe the chart and remained bearish, switching opinion just in time to catch the bear downwave. Now the Dow chart says we are in a 7 week (m/l) uptrend. January to April can well be the formation of a double bottom (appears mostly likely at this point) or a trading range whose range has just been extended in order to create a bull trap. The skillful action in these cases is to scale in to a position. Lightly lightly when there is much uncertainty.

An example of the mixed signals of the markets is the Qs which turned around in a few weeks after what appears in retrospect one downwave from December. Now both upwaves (Dow and Qs) appear to be at a critical point and if we were just betting with our gut we would expect a downwave at this point.

Now this talk of a gut feel and such is partially supported by the position of prices on the chart and partly by the length of the waves — up in the case of stocks, down in the case of gold and silver. We might be putting our toes long in the gold and silver, but would be ready to scat if the horizontal lines were broken.

What is there to be said about OIL except — start a fire in the oil fields of the MidEast and reap the whirlwind. And reap the profits by betting on the sticky black stuff.It is late in the day to be adding on though.

In DBA and the agricultural commodities the downwave is playing itself out and although it is against good conservative practice some toe dipping might be tried here too.

Actually if you had bought that big gap in March and set a basing point stop (well under the March low) you would still be long the dollar. You might have had your brains scared out but the short term position is long and we wouldn’t short the dollar in here against the important immediate trend.

NOW HOPEFULLY YOU ARE ENROLLED AT THE edwards-magee GOOGLE GROUP because we are sending an important long term chart there which is imperative to see.

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