Timing Market Turns - Our models' algorithms produce exact dates for changes of trend direction - days, weeks and months in advance of the turn.
 
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UP!  UP!  And Then Which Way?

We expect an upward market this week.  It may begin from lower levels if a large reversal downward occurs from slightly higher intraday levels today. 

Some analysts may call it "a sucker's rally", others may call it the beginning of an intermediate term (3-6 months) upward move.  Even more may call it the beginning of a new Bull market.  Most will hope it's the latter.  We believe that it is minimally a small upward corrective before a final downward move, not necessarily to new lows, to complete the first portion of the long term Bear market decline. 

The best case is that this week begins a longer term upward corrective movement in the ongoing Bear market.  That would imply that A phase of the Bear is over and the upward B phase is beginning.

The indexes have been extremely oversold and downward momentum has diverged over recent weeks as "plunges" have begun to turn upward with ever strengthening volume patterns.  Commodities are 'crashing' and the U.S. Dollar may stabilize and rise against the major currencies for successive months.  The set up for a longer term rise in equities exists but for the taking. 

If the end of the A downward phase is not complete, then the final completing downward move should begin within a week or so.  Succeeding that move, the indexes will likely produce the longer term upward push.

Even if an index were to rise to new highs, above the October highs, later this year (15% potential), the Bear market would still be here.  The markets and the economy would still be in corrective phasing.  We don't expect an end to the Bear market and the recession until 2012.  The Bear market may end before the end of the recession is recognized by several months, as a leading reflection of bottoming economic indicators flatten out in 2012. 

That is a long time into the future for traders, but not for investors.  The current upward move may provide investors, still holding stocks, with some relief for their high quality stocks that were dragged downward in the drop from July and October 2007.  We have price levels for several index structure phases, that if exceeded, will greatly increase the potential for an extended upward move (reserved for Members) in coming months. 

Our highest probability scenario from modeled track and phasing, brings a bounce upward to nearby resistance and a forceful downward move that again pushes investor and trader sentiment to very bullish levels.

The Bearish case - It is the easiest to explain.  The indexes continue downward from this time and then bounce upward back to these levels from much lower support levels.  Slightly less bearish is the bounce upward to minimal resistance levels and then drop steadily into an early summer low.

W. B. Busin

March 24, 2008  0300 EDT


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