Hi Steve,
I don't know what's the most correct way to draw a fork, or does it work at all. I'm sure you can draw it differently to obtain another price channel.
About the huge price swings. On my book, since 7 trading days ago, the market has topped out. So bullish action should be rejected. I'm just happy to see the bull everyday, so I can find a way to whack it. I think that should explain the big swings.
The question is, does it look toppy now? Not anymore, not after today's action. It looks neutral with a downward bias to me. Assume we've just made the top, the market is now searching for a bottom.
I've been doing some economics readings lately. I'm convinced that we will see a recession next year, as early as 4th quarter of 2006. I'm going to check the GDP number carefully, I think we are heading to 0% or even negative, a number far away from the current projection. The FED will scramble to ease rate, and any rally will become a sucker's rally. At first, people will think that the rate easing is normal, but when they figure out the rate easing is actually due to the recession, the stock market would be down another 10% already. In short, I expect to see a hard landing. I'm ready to convert my USD to other currencies in any rally, USD has zero upside, unless core inflation goes through the roof, FED will not increase rate anymore. FED will never say that they are worried about the coming recession, they would only say economy is slowing down to offset the inflation rate. Soft landing is just a wishful thinking.
