Intermediate term, I have no idea what the market is going to actually do (not with anywhere near the certainty that I called the rally the day after a 200 point drop).  The intermediate term picture is just too complex.  But I do know this:  we’re nearing the end of the converging channels that I pointed out in the Random Walk My Ass post.  In the included graph in this post, I’ve turned one of the channels red.  If we break through this (and it could be tomorrow) this will be extremely bullish for some time to come, quite likely all the way through the year up to Dow 17,000ish (with an intermediate correction somewhere in there).  If we don’t break through this and we get closer and closer to the White line on the right…it will be more and more likely that we’re heading for a pretty massive drop, but I give this a lower probability of happening, because the shorter term outlook would suggest that we need to complete wave 5 (I’ve labelled 1-4).  So, I’m not buying at the moment, I’m just letting my winners ride and continuing to tighten up my stops as they move up.  Oh, just as I predicted LNKD popped nicely, really nicely.  If we break through the Red channel, I’ll likely add to LNKD and look to add more positions.

2 Comments on Nearing Major Inflection Point

  1. socer says:

    Exactly is the formula for big red line? Is it the Fibonacci retracement for one of your moving averages or what?

    Also, good work, looks like you were right!

  2. scottvanv says:

    Take a look at the Random Walk My Ass post. The Big Red Line is the upper channel of the smallest channel shown on that chart. And, welcome! I’m curius how you found this…I thought only about three people read this blog, one of whom is my wife! 🙂

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