Luna $ Ticks

August 4, 2008

Be ready for the rally

Filed under: Trading SPX SPY — moontrader @ 2:02 pm

In my previous posts, I made the case for a short term strong bear market rally before resuming the downtrend which would breach the 1200 bottom of 07/15. Today’s market behavior makes me believe otherwise, and my presumption is based on the proportions in time shown in these charts.

This first chart shows how two significant tops/bottoms dates can be used to predict with great accuracy the date of an important turning point. Notice that the purple and green proportions project intermediates bottom and top, respectively. The red proportions, however, involve a longer time frame containing previous subwaves, suggesting that a more significant bottom might be in place.

The all-time top from 10/11/07 projected ahead using F11 produced a bottom. Therefore, in this moment, F11 is producing reversed tops/bottoms. Using F11 as a reference for trading the following days, the top of 10/31/07 should correspond to a bottom:

10/31/07 + F11 = 08/05/08

We actually might have seen this bottom today, 08/04/08. If not, we’ll see it tomorrow, 08/05.

In any case, today we’re closing below a confluence of the 3 DMA’s I usually refer to (3×3, 7×5 and 25×5) while MACD points up. The last time a similar – but reversed – situation occurred was on 05/06/08, when we closed above the confluence while MACD was pointing down. The next day, 06/06/08, we had a major decline.

There’s a good chance we’ll open tomorrow, 08/05/08 with a gap up triggering a major rally which should last until Friday, 08/08/08 or Monday, 08/11/08.

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3 Comments »

  1. I’ve been paying attention to what you’ve been posting on The Slope of Hope. Just discovered a few minutes ago that you have your own website. I’ll come here again. Best wishes.

    Comment by Urszula — August 5, 2008 @ 5:10 am | Reply

  2. Appreciate you sharing your charts as well. Nice call on todays open. Looking forward to your future posts.

    Comment by Jigsaw — August 5, 2008 @ 9:54 am | Reply

  3. Welcome you both and thanks for dropping by. I’ll try to keep a post a day to share my ideas on the next moves, while discussing other people’s ideas on Tim’s blog – which is amazing.
    Right now I’m trying to figure out what kind of sign I should pay attention to in order to catch this short/medium term trend reversal. I’ll soon write a new post with a couple of ideas.

    Comment by moontrader — August 5, 2008 @ 12:51 pm | Reply


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