The collision of global markets and social mood

Monday, January 13, 2014

The Alternative Law Of Large Numbers

This is the chart that interests me this week. A new high tomorrow would be ideal if it occurs on any kind of internal weakness.

Notice also that the folks who published this excellent work are the inventors of the McClellan Oscillator, which is flashing a multi-month warning sign. Any new high today or tomorrow will likely trigger an outright sell signal on the Oscillator.

I still do not think a high is in. Though I'm using a mental stop at 1811.08 (I never use mechanical stops), it would take a violent move through 1767.99 to signal a top, though it probably shouldn't be under 1800 anyway.

Currently, the 1554 area is the 38% level from the 1849.44 high to the October 2011 1074.77 low. I consider the October lows to be the fulcrum of the entire move from March 2009. Should the market agree with this thesis, 1074.77 can and will act as a magnet at some point. Price could easily bounce off the 38% Fib level (1554) and still be in a technical uptrend -- kind of an alternative law of large numbers that few are prepared for.

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