Happy New Year all of you and Happy 100th post to myself! I never thought I'd continue writing posts on this blog, as it was really only setup for me to talk to myself (yes, I know that means I'm crazy)... but I've had a few days off and feel refreshed again!
It's a lot more work then I thought it would be, and I sometimes get discouraged when the market simply goes sideways for days weeks months on end, and then every time I'm forecasting a move based on the charts... nothing happen!
I feel like a idiot staying that the market is overbought, with all indicators pointing down... and then the market rallies! Yes, your clothes are on fire... but don't worry, you won't feel a thing! Duh!
Anyway... I'm looking forward to an exciting new year now!
Ok, I'm posting a chart from "the chart pattern trader" below (hope he doesn't minded). This is what I'm expecting to happen over the next 2 weeks.
I'm not looking for more then a 10% correction, before the rally continues to the 61.8% Fib level or the 200ma level... which will probably hit the same level by the time we get there. Somewhere between the 1226 and 1300 spx level, as the fib is different for the monthly, weekly, and daily charts... but that's the general area I'm expecting to hit by mid-year.
The 200ma will provide huge resistance, and if that also connects to the fib levels for each time period... which I expect it to do, then I believe that will finally end the Primary Wave 2 Rally. I'm actually sad that the wave to follow will be so devastating, and will wipe-out all those "retail" investors' savings and 401k plans.
But, I didn't create this bubble... that was Goldman Sachs! Maybe the people who will have their life savings stolen from them, will rise up and a demand for the crooks to be arrested? What else will 15-20 million un-employed middle classed Americans have to do... but march on the White House steps!
In a fair world, the market would rise and fall smoothly without manipulation and false bubbles inflating to unrealistic levels, followed by huge crashes. But, we don't live in a fair world. Greed from corrupt banksters, and others that stay hidden, create these boom and bust cycles. All we can do is to try and follow what they are doing and profit along side them.
The alternative is to be the victim. Profit with the crooks or be robbed by them... tough choice huh? Yes, if you have any moral values. But, you must focus on the good things you can do with the profits from following the crooks on wall street. That's what I'm trying to do now.
Accepting that the market is a heavily manipulated game, and adjusting my trading to include those factors has been hard to do. After all, the crooks didn't pick up the phone and call me to say... "Hey Red, we are going take the market up to ? by mid-2010, and then crash it down".
No, they forgot to call me. So, I followed the same charts that everyone else did... and got burnt going short, as they printed another $10 Billion Dollars to use in the market to stop a natural correction. Was that cheating... of course it was!
And of course that confused all the technical traders, defied the elliottwave predictions, ignored the short term fib levels, turned the astro turn dates upside down, and got the bulls high on helium gas! Did I leave anything out?
Anyway, I'm hopeful that a huge crash down doesn't happen now... but I'm more confident that it will. The higher we go, the further the crash down will go to. If the forecasts are right, and I believe they are, then 3,000-4,000 Dow is where the market is ultimately headed. That means that the high coming this year will be a high that we won't see for many years to come... remember it well.