Tuesday, January 26, 2010
As one can see clearly the characteristic of this decline is very different from any of the small correction which happened on the way up besides the fact that the uptrend has been broken. Its steeper in character has taken out the former support level easily and what you can not see on this chart is that weekly and monthly patterns say the same thing as we have strong reversals. Mid February will bring a brief rally 1-2 weeks before the downtrend resumes. The Jupiter effect we had for almost 6 months is gone and replaced by tough squares which means the pink glasses are off and reality comes. back even tougher than before and the markets do reflect that over time now. We are now on our way to retest the lows as I said in earlier posts but lets see it from a conservative point of view and just fix it as a correction which was overdue than our target is the 9500 short term ( til mid Feb) and 8000/200 til July ( that's the conservative approach ) as in case that happens Obama will throw another trillion for Mainstreet on the table of stimulus packages for the midterm elections and the FED will buy stocks again to save the day. The real shocking part of all news flows could be delayed after the mid term elections as DC has lost all decency it had left. Obama still defending Bernanke is a sign that he wants him exactly for his helicopter skills in the seat as those will crash America at the end since the money press at this stage can not repair anything just buy time and the ultimate way out of a now way out situation is to trigger a war before civil unrest takes to much momentum. Check the charts of the last 200 years - wars have always triggered a rally in stocks.
Posted by getagrip at 4:05 AM