trendscanner
265 posts
msg #83929
- Ignore trendscanner |
12/7/2009 6:19:33 AM
With the market now having reached the 50% fibanocci retracement level from the absolute top in Dec 07 to the Mar 09 bottom, I thought it worth a look back to see what happended during the last bear market recovery.
Link below shows the 2004 50% retracement and current 50% retracement.
http://stockcharts.com/h-sc/ui?s=$SPX&p=M&b=5&g=0&id=p38868734986&listNum=1&a=185042761
After the recovery from the 2001 to 2003 bear market, the SPX reached the 50% fib retracement level in Feb 2004, tried it again in Mar 2004 and couldn't get past it. Took 8 months of sideways action before it made another, this time successful, attempt in Nov.
Wondering if we'll see something similar this time. Unless the market breath indicators show a broader recovery that includes small and mid caps, I'm a little skeptical that it will happen immediately or before end of the year, but I'll adjust the few positions I have open now accordingly if it does.
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trendscanner
265 posts
msg #83974
- Ignore trendscanner |
12/7/2009 7:31:00 PM
Max 2 Year Bollinger Band Squeeze for the major etfs and large caps in progress now, i.e., the difference between the upper and lower BBs (20,2) for SPY, QQQQ, DIA, other etfs and many large caps has reached a 2 year minimum.
Might see "Blast Off" or "Timber" this week. Maybe a good time for a long straddle.
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BarTune1
441 posts
msg #83976
- Ignore BarTune1 |
12/7/2009 8:50:13 PM
Very interesting trendscanner. I have been observing as much the past few days from looking at my charts that track the broad markets.
I completely agree that these markets will likely resolve the contraction one way or another quite soon. I am thinking to the downside as I simply can't see how things would rocket to the upside given the state of the US economy .... at least what I have observed in my travels.
Given the low volitility, it probably would be a relatively good time to enter into a straddle on a couple of the indicies or maybe a high beta stock.
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