Thursday, September 04, 2014

Marty Chenard had an update today entitled "The Conundrum", here's the link:

You have to read the article, I'm not really into long drawn out essays on why the markets are a bunch of bull shit, I think Marty was trying to say that in the article but he's to nice of a guy.
His chart is about the $NYA, this is the DIA, I mean, it's doing the same thing, almost EXACTLY as 07', accept the divergence is LONGER, we only diverged into the 07' high for 11 months, the current one is going into it's 17th month, which probably means the FALL, if it EVER comes, will probably be worse than 08'. There's 3 RSI's on the chart, starting at the top it's a 2, 5 and 13 period.
So my reaction is, "WHO CARES"!!!!!!!!! Based on the volume, NOBODY DOES, hahahahahahahaha! The only thing different from Marty that I would mention is the red box in the middle, you notice we got a divergence on the 5 RSI for 21 months in 2011 into the open of 2013, the big difference compared to now is the markets went basically SIDE WAYS, and set up a little ascending triangle into 2013, entirely different than we have now. I'll mention some thing else, if you take the run up from the low in 09' to the high in May of 2011, that was 64 points, if you add that 64 points to the low in September of 2011, you get 171................hahahahahahahaha.......... that's called an "Equal Move". Also, Ya know, it's been 66 months since the low in 09', and the final low in 2011 is only one month off of being exactly half way, or 50% between 09' and where we are now.
Fun with numbers is all that it means. We are never going to get a decent move to the down side until the retails come back into the market, which the Institutions and Wall Street need in order to have some one to sell to. And the retails won't come back until they start saving enough money that they have mad money to throw around, and they can't save any money with the low interest rate policy of the FED, and that's not going to end until the retails start spending money to jack the economy up, and they don't have any money to spend because they can't save any money because of the low interest rate policy of the FED, which isn't going to end until...........................................................

Buy Into Weakness If Profit-Taking Continues
The market is displaying one of the most powerful and reliable technical formations. Get my take.

That article comes from Sam Collins, now, folks that have followed me for a while know how much I like old Sam, hell, he's almost as old as me, but he does get carried away at times. He's talking about the SPY and a "V" bottom pattern, it surprises me as he usually puts a little disclaimer in when he makes statements like "Powerful and RELIABLE", I mean, all he has to do is show the IWM this year and you can see TWO "V" bottoms have failed already this year, and it's working on it's third. 
The Technical dictionary defines it as thus:

In technical analysis a chart formation caused by a sharp extended decline followed by a sudden upward movement. Some chartists believe a V formation is NOT generally a good indicator of a major change of direction in a security's price. These people believe that a major price reversal requires a period of testing low prices with succeeding price advances and declines. Only after this consolidation phase takes place can a new bull movement be assured.

Couldn't have put it better myself, especially the "consolidation" phase, which we haven't been getting. In fact, and in keeping with this "COSTANZA" market, not only do we not get consolidations, but the markets go UP faster than they go DOWN, and the IWM shows that on both of the right side of those "V" patterns. 
Wad ever, I mean, Ya gotta do wad Ya gotta do, throw caution to the wind and go for it, the FED will ALWAYS be there to save us from making any mistakes. 

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