BREAKOUT BUY SIGNAL – 08/23/11 © ™
- If charts (or links) don’t work, please click the address below (paste the address into your browser if clicking doesn’t work)
- https://stockmarketobservations.wordpress.com/
************************************************************************************
- Short Term
- July 2011 To Present
- Step 3 Down – Finished
- Current Action Status – Buy Signal Today
Today we broke out of the bottom congestion area. The chart below illustrates the breakout.
- 08-23-11 SP500 FUTURES 10 MINUTE BARS – 2
We closed on the highs today and that bodes well for a continuance of this rally. In the worst case scenario this rally should carry at least above the highs made on August 17th. That is another 350 points for the DJ Industrials. The best case scenario is that this is the beginning of large step 3 up, which would take us above the May 2nd high of 12,876. That is 1700 points higher than today’s close.
The only caution is that we should not fall back and close significantly below the upper green lines. These lines, particularly the lower one, should act as support to any correction that might ensue. A significant break below the lower green line would be unanticipated and could negate the prospects of a viable bottom. I always say significant because these levels are not engraved in stone and are rather fuzzy in reality.
The kicker in all of this remains the anticipation that the FED will announce something helpful on Friday. If there are leaks regarding a positive Friday address by the FED chairman the market could be substantially higher by then. The converse is that the market could be surprised by a lack of good news from the FED chairman. If this were true we would look for the market to sell off. But if we have a significant bottom already in place, the sell off would not be sustained and a rally would continue. We have to wait and see what happens on this front.
I have been writing about a possible market bottom since August 19. Very few people will buy near market bottoms because they don’t understand the rationale as to why the market should go up. The overwhelming reasons why the market should go down are so powerful that only a crazy person would buy under these conditions.
The following link is a PDF file that every reader should almost commit to memory. This was written by Edson Gould, who was the premier stock market analyst EVER. He made repeated stock market calls that were unbelievably accurate. The following PDF link is titled “My most important discovery”. It addresses the importance that psychology plays in the stock market. When you understand how important psychology is to the stock market, you can become leader in your stock market actions instead of a follower who is always buying (or selling) too late.
My Most Important Discovery, By Edson Gould
All Rights Reserved © ™
Explore posts in the same categories: SELL - BUY
Leave A Reply