Wednesday, July 7, 2010

Once More Unto the Breach, Dear Friends

I think the DJIA probably has a few hundred more points at most to the upside left in this short squeeze.  Regard this as a gift from the Bear, allowing those who wish to exit the equity markets to do so and be able to tell their grandchildren that they sold when the market was still above 10,000...

3 comments:

David said...

You knew that when Bob was getting more media play and short term downside momentum was oversold and diverging, we were apt to get a bounce.

The interesting part will be when Bob gets lots of media attention and the market just keeps falling. If that happens, look out. Measuring declines in nominal points may have to give way, then, to measuring declines in terms of percentages...and we know that a something can fall 90%...and another 90%....and another 90%, indefinitely. The only question then will be, how do we gauge things in that "new era?"

Flagg707 said...

Interesting. In addition to the hemline indicator, we'll have the Bob Gauge. One indicator will probably be that when he turns bullish again (would that be for Grand Supercycle B up?) and the pundits call him crazy (if anyone is even paying much attention to the markets at that point), then we'll know a bottom is in or at least close.

David said...

As we both know, calling the ultimate bottom will be extremely difficult, as was calling the ultimate top.

Once having erased 95% (guessing) from the b-wave top by hitting 705, the Dow could still easily drop in half again from there, and would still be within a 4t wave of one lesser degree to drop in half AGAIN.

While my plans definitely include layering into a Wall Street no one else will touch at that juncture, it will still be as hard as stepping in front of a freight train in the belief that it will stop and reverse (to borrow Bob's viscerally accurate analogy). I have no doubt that everyone who tries to play this game will get it wrong a few times before getting it right is an option.