Quote:
Originally Posted by Simonyadig
Here's what I see in that chart. The two peaks made a potential double top with confirmation being a convincing break below the lowest valley between those two peaks. The lowest point of the recent market crash traded well below that valley from 02, but now it's at least temporarily gotten back above it. I believe that was actually a convincing confirmation of the double top and a sign of things to come, and this recent rally is one last gasp by the bulls trying to save themselves. I still wouldn't be surprised to see this rally push us higher, maybe even upper 120s, but I am strongly convinced that the bears have a massive wave coming from them. To me I see that move down from 155 -> 70 as being the first attack from the bears but definitely not the last. It went far enough to really break that 02/03 low and truly reveal the extent of the power of that bearish move, but after such an extended move in one direction a correction was virtually guaranteed. Now the bulls are overextended, the bears well rested, investors are complacent and overconfident, the dominant trend from the last 3 years is down, and the table is set for bloodshed once again.
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IMO it went lower this time because of the velocity of the drop. Y2K's drop was nothing to compare on that front, it was much more gradual. Panic was bound to drive the auction lower this go round, given the speed of decline. So while there was a lower low and even a close beyond the support line I drew I don't agree with your stance.
IMO the bears are very scared and some of the continued momentum is bears covering. I don't think it will be easy for the bears to get another massive drop like we had prior.
JMHO. Time will tell which of our opinions is right.
