After today’s crazy market action, I went back and analyzed to find out if there was any historical context that could be used to interpret the current situation. Leaving aside the 2002 bottoming that took months, the closest match comes around the LTCM crisis time in 1998. I’ve attached some charts circling the area of interest. What I find interesting is, the pattern replicated itself again with two major differences.
1. LTCM pattern was in the context of a secular bull market, while now it is a secular bear market. If one LTCM can create one month of crazy action, I can’t think how many months the current hedge funds problems will cause.
2. The intermediate term market forecast indicator remains very weak while during the LTCM crisis time the recovery was strong.
Posts
1 comment:
Arun, I am Rakesh, I am just doing TA on my own and doing paper trades. How do you post Charts on blog? Also I see your point on Atalia's blog. Here I see you are comparing trande, circle on left is on bull trende pull back, 2008 is bigger mess, see the volume, too much churn and trend is bear, that means triple bottom can bounce little and give up after or ready to break now and go down more. Election result and global shakeout, Q4 is going to be weak and Q1 is aways slow and time to pay uncle sam, so we can be side way's with 200 point chanel on ES. OR 2500 point on Dow, so upper range 11000 and lower range 7500, up and down weekly.
You can send me email rajeshkumar.gupta@intel.com. I have a blog but i need to learn how to post charts. I did once but it took for ever and I forgot. Any help is appreciated. Rakesh
http://tradeinmarket.blogspot.com/
Post a Comment