Tuesday, September 21, 2010

SHORT TERM TOP?

The market is now 16 days into the current daily cycle. We typically see a minor half cycle correction around day 15-20. I'm guessing the Fed is going to give the market exactly what it wants to hear today. I also think the market has already discounted that.

I expect the "news" will be used to take profits after the strong rally of the last three weeks (the pullback into the half cycle low). I also expect bears will mistakenly see this as the market finally coming to its senses and heading back down.

Unfortunately I'm afraid they will be wrong again. This should only be a brief profit taking event to dampen sentiment before the next push higher. Possibly to test the April highs.

15 comments:

  1. so you say a 1/2 cycle correction at 15 -20 dAY ON AVG, is there an avg amount of days that these corrections typically last? Or weeks? I am not yet familiar with ur cycles.appreciate ur help.

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  2. Gary,
    Do you think we made the bottom already at 1270? It is very interesting what will be next,since we have a new top I think direction will be up for the rest of the week.Maybe I am wrong again:)))))
    Ivan

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  3. No I think it's more likley that my orginal scenario will play out, with the dollar testing 80 and gold tagging $1300 before the real correction begins.

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  4. The move from 1284.45 to 1270 today and then over 1284.45 now looks to me like the corective move we had on August 23 when we tested 1210 and it was only two days corection.
    Ivan

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  5. yes, and now that looks like tomorrow. THIS must be why you said not to get cute and trade in and out of these during a pssible runaway mkt.

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  6. Gary,

    If it plays as per your cycle anticipations, would that make it a 2-3 day affair into half cycle low?

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  7. There's no need to try and guess. We'll just wait for a swing low once it's obvious the decline has begun.

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  8. Understood,

    I was just asking for a ballpark half-low based on your past observations, and I am referring to the equity market

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  9. Sometimes they are minor and sometimes they can be a sustantial correction.

    The Oct. 09 move was a half cycle correction.

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  10. Toby do u think the hui is finally going to set sail here on its way to 1000 and beyond? I think it's time to get moving deservedly so and it's way overdue

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  11. Toby do u think the hui is finally going to set sail here on its way to 1000 and beyond? I think it's time to get moving deservedly so and it's way overdue

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  12. i recall U said that often runaway moves ignor 'overbought' and 'trendlines' and 'patterns' and are extreme moves spurred on by extreme sentiment( no quote intended).

    I looked at the $$ chart and see it at $.79 3/4...it looks like it wants to drop to the .$74 of last dec as quickly as it dropped from $.88 to $80 in the last 2 months!

    Gold could breakout & retest, as U say...or just run-away at this point.... Oct is usually corrective for gold and i sell and rebuy, but this time I'll take ur 'old turkey' advice and ride this bull. the move UP last Nov- Dec in gold stocks WAS tough to jump back on.Thx for such accurate commentary so far Gary/Todd

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  13. On second thought...

    My last comment shows sentiment IS too bullish...so a pullback Must be coming haha :)

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  14. Robert,
    Just watch the next swing high. If it falis to produce a pullback then the odds are high the runaway move is in force.

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