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Tuesday, March 04, 2008 7:45:50 PM
Stocks on the Brink of a Bear Market
At the end of January, I wrote the article entitled, A Probable Path Revealed . In that article, I suggested that the January23 rd low was just the ending of wave (i) of C. After a brief rally, I expected waves (iii), (iv) and (v) to proceed. Well, the rally wasn't brief. But it appears that wave (ii) is now complete. Rather that using Elliott Wave, I have been keeping a chart of the DJIA with the head-and-shoulders neckline (red), the trendline of the advance from March 2003 and the Fibonacci retracements. They tell a compelling story at a glance.
You can see clearly that we are on the brink of breaking the trendline that has effectively held the bottom for five years for the second and final time. Once broken, the DJIA won't just retest the January low, it should, in all likelihood, drop to the 50% retracement or lower.
But that's not all. The rally out of the January low overlapped the November low twice. That eliminated the first decline in November as a wave 1. Instead it is an A. It follows that the decline that we are starting is (iii) of C, which may extend considerably further than the 50% retracement. That raises some interesting possibilities. And we are just at the brink of discovering them.
We're on the air every Friday.
Tim Wood of www.cyclesman.com , John Grant and I are back in our weekly session on the markets. This week should be fascinating. You will be able to access the interview by clicking here .
New IPTV program starting in March.
I will be a regular guest on www.yorba.tv starting on Thursday, March 6 th at 4:00 pm EDT . Stay tuned for news and views!
Please make an appointment to discuss our investment strategies by calling Claire or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .
Regards,
Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com
As a State Registered Investment Advisor,
At the end of January, I wrote the article entitled, A Probable Path Revealed . In that article, I suggested that the January23 rd low was just the ending of wave (i) of C. After a brief rally, I expected waves (iii), (iv) and (v) to proceed. Well, the rally wasn't brief. But it appears that wave (ii) is now complete. Rather that using Elliott Wave, I have been keeping a chart of the DJIA with the head-and-shoulders neckline (red), the trendline of the advance from March 2003 and the Fibonacci retracements. They tell a compelling story at a glance.
You can see clearly that we are on the brink of breaking the trendline that has effectively held the bottom for five years for the second and final time. Once broken, the DJIA won't just retest the January low, it should, in all likelihood, drop to the 50% retracement or lower.
But that's not all. The rally out of the January low overlapped the November low twice. That eliminated the first decline in November as a wave 1. Instead it is an A. It follows that the decline that we are starting is (iii) of C, which may extend considerably further than the 50% retracement. That raises some interesting possibilities. And we are just at the brink of discovering them.
We're on the air every Friday.
Tim Wood of www.cyclesman.com , John Grant and I are back in our weekly session on the markets. This week should be fascinating. You will be able to access the interview by clicking here .
New IPTV program starting in March.
I will be a regular guest on www.yorba.tv starting on Thursday, March 6 th at 4:00 pm EDT . Stay tuned for news and views!
Please make an appointment to discuss our investment strategies by calling Claire or Tony at (517) 699-1554, ext 10 or 11. Or e-mail us at tpi@thepracticalinvestor.com .
Regards,
Anthony M. Cherniawski,
President and CIO
http://www.thepracticalinvestor.com
As a State Registered Investment Advisor,
Buy 'em when they are crying, sell them when they are yellin'
More charts
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID456385
