Monday, August 10, 2009

map and compass

price advances always have corrections. market prices in the US "should" always advance over long term.

a technical analysis correction called the "symmetrical triangle" is what i observed the 1929 corrective price movement. i would imagine chartists might be expecting the same "top declining, bottom rising".

the technical correction i noticed with the march bottom was that it was a declining bottom when compared to the internet price decline of 2001. then i compared the internet price advance to the dow 14,000 top. this purports the evolving of a REVERSE symmetrical.

funny how the market does this. many may expect a normal symmetrical correction; instead a reverse symmetrical extracts their money. the reverse symmetrical matches the "BULL TRAP" which you may have exhibited along with so many whom believe that everything is "back to normal". PIMCO even exudes that we are moving toward the "NEW NORMAL". perhaps this is why the market period we are in is called a BULL TRAP.

the REVERSE symmetrical evolves into two rising tops and three declining bottoms before advancing higher out of the price correction which started with the 2001 internet price decline. Dow 14,000 was the first top after that therefore it may be expected the correction would emerge with one more higher market top. two bottoms have occurred, the first the internet bottom of 2001, and the march 2009 lower bottom.

i think we are traveling toward Dow 14,000 with a small correction on this recent short term advance. Q3 earnings will look great yoy, more govt antics and poss inflation worry may help support that move.

the price decline following the next Dow 14,000 may complete the BULL TRAP's NEW NORMAL where price declines travel down even more than we experienced as of yet. This is where despair will complete what i think may be the "W" recovery, not the L which is how things look right now.

a decline below the March 2009 lows will be significant and the advance from there will be huge. perhaps supported by mass inflation. Jim rogers thinks Dow 20,000 which does not too far fetched after the 1995 internet boom price correction is complete.

at this moment, the PRESENT, the NOW is where i shall operate, attempting to use some of these thoughts together with several more as a map and compass to navigate through this journey.

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