5 Comments

1. dumbpainter

   Posted November 6, 2008 at 9:16 PM

   Scary stuff. And well designed! Thanks.

2. Shanky "Mr. LONG (is gone)"

   Posted November 7, 2008 at 8:56 AM

   Excellent charts. If the remaining head and shoulders play out, it looks like we’ll have a major breakout in 9 months. Craig, will you please keep this larger trend in mind. This could be a great call next summer or fall for all of us to get really long.

   • Craig

     Posted November 7, 2008 at 9:06 AM

     Shany, perhaps you didn’t see the pattern that we are referring to.

     http://social.stocktock.com/photo/potential-inverse-hs

3. TheStockJock

   Posted November 9, 2008 at 2:02 PM

   The idea of linear regression is an old idea that is reffered to as a “fair value line” where by you draw a bet fit line between 0 and infinity and that is suposed to represent “fair value”. I believe that it is flawed as there is no such thing as linear population expansion. I do however believe that the “fair value line” if recalculated on a continual basis as is shown in the first chart can be used as a guideline. The idea of a further crash to 5500 or so doesn’t seem likely. This kind of crash happened once in history and its effects were so horrific that all kinds of adminstrations and tools were put in place to prevent such a thing from happening again. I don’t think these tools have been used properly and as such we’ve ended up with large deviation from true value but I think they have been used well enough to keep from another 1929 crash….although this maybe the next exception .

   In my opinion given the tools that are in place to prevent 1929 style depression we are probably more likely to have a long volatile period that corrects over time. As time moves forward that true value line will move up to meet the curent prices. This US has put themselves into a horrible state and it is going to be a long time before things are corrected but with a current drop in market of near 50% it would seem unlikely we’re in for more shedding of value. Afterall at this point we are assuming that companies have not expanded at all in the last 10 years. The number of consumers over 10 years is certainly larger even if they aren’t all spending as frivilously. It is my belief that we’re likely going to correct through large volatile swings until such time as we’re ready to actually move higher. Maybe it takes 25 years of sideways chop up and down but it seems unlikely that we’re going to correct further through price. THIS IS A TERRIFIC OPPORTUNITY FOR US TRADERS. THERE IS NO BETTER MARKET TO TRADE IN THAN A BEAR MARKET. Investors will again have their day but it seems like now is the time for traders.

   Just an opinion into the current situation but remember its just an opinion and the possibility of a severe price correction to get things back into bull mode is a possibility.

   Trust the charts, trade the price action.

4. Craig

   Posted November 6, 2008 at 10:37 PM

   It sure could be.

Comments Closed

Comments are closed. You will not be able to post a comment in this post.