Luna $ Ticks

August 22, 2008

New Date Proportions

Filed under: Trading SPX SPY — moontrader @ 1:45 pm

A couple of posts ago, I made the case for a top on 08/11 and it did happen. However, the market isn’t behaving as it is “THE TOP.” And the proof of this was yesterday and today’s market action. As I posted yesterday (and, btw, the day before yesterday) with simple charts that deliver the message, DMA 25×5 held prices, therefore, short term trend is still up. Which means, we can see new highs in the next trading sessions. So, here’s my idea for a top, in terms of time. There’s no blog around using time as part of a study, so here’s something you might find helpful.

In this first chart, you see how the top on May 19th has consistently producing tops according to these proportions, and the next important date is September 2nd.

In the next chart, you can see that from July 15th to September 2nd is a period equivalent to all-time top October 11th to the first significant bottom on November 26th. Notice how October 11th, 2007, relates to the bottom on July 15th, 2008, with an error of only 1 day (that’s 1 day in a period of 279 days!).

This last chart shows September 2nd relating backwards to certain dates. Other than the dates pointed in the previous charts, you have the top of July 23rd relating to, what I believe, will be an important date for the markets.

Just to remind you, if we do resume the downtrend, there’ll be no doubts about it from the very beginning. It’ll be fast and furious.

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3 Comments »

  1. One thing I wonder about is what news event will trigger a large decline like that. Either something with the financial sector, energy or Russia would be my 3 best guesses. Your time projections should also be around when the VIX meets the May lows as well.

    Comment by Jigsaw — August 22, 2008 @ 9:36 pm | Reply

  2. are you thinking that 9/2 will be the top for spy? what price do you project for the top on 9/2? thanks

    Comment by aymon — August 23, 2008 @ 5:01 pm | Reply

  3. Aymon, this is just a reference for a possible top. I don’t know what the top would be or how significant. It could be a short term reversal, a temporary top, the top before a huge plunge, or just nothing happens at all. However, sometimes a date projection matches with prices hitting a fib resistance/support level. In these cases, if you act on it, you can be very well positioned since you’d be opening a position before indicators show the change in the trend. However, I wouldn’t recommend trading only on the base of a date projection: this works better as a reference or an alternative tool to support a strategy.

    Usually, an index starts to show some signs of a nearing top/bottom before the date. For instance, it might be overbought/oversold, or show a weakening MACD, or Stochastics turning negative, or divergences (MACD, volume, etc…). Date projections are to be seen as references.

    Comment by moontrader — August 23, 2008 @ 5:45 pm | Reply


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