November 28, 2007 - Market Recap

The DJIA had a very good day. The downtrend that we are in looks like a classic Elliot Wave. We are starting into a slight upturn in a bear market. It appears that it may go to 13,500 and then turn back down. This should occur by the end of next week. The downtrend will resume and go below 12,500. The five waves can easily be seen during the third wave down. We are now in the 4th wave up. which should be very similar to the uptrend the end of October with 8 days up. We have now had 3 days up so another week and it should turn again and have a significant down turn.
The S&P will hit resistance at 1,500 and will turn back down. Notice the first wave down hit support at 1,500. That has now turned into resistance and the first wave will not be broken at this point before another turn down. There will probably be some consolidation for a couple of days and then up to 1,500 and then back down significantly.

The Nasdaq is not a clear cut as the DJIA or the S&P. It did a double top and then turned down. Would expect it to go to 2,700 and hit resistance and then turn down again.


The Russell will hit significant resistance at 780 and then turn back down. That will be about a 50% retracement. Notice how the Stochastics are hitting lower highs each time but not a lower low. Shows that the bears are winning.

Be prepared for a major downturn in a week. All indicators are that cash is flowing out of the market.

November 26, 2007 Market Recap

Once again, I have not been posting like I should. This shows I am not paying as much attention to the market as I should and I have been losing mone because of it. So I will try to start posting on a regular basis again.

The DJIA is in a downward channel. Five waves from Elliot Wave theory can be seen on the chart since the 14,200 high in October. I am anticipating over the next few days for the DJIA to hit 12,500 and then moving back up to 13,400 and then going down again to 11,800. Since January typically has a good run up, the 800 points will probably occur by the middle of January. Notice how the OBV is below the August low point so expect this to go lower going above the 14,200 mark. I have also included the SVAPO. This is a new indicator described in the November issue of Technical Analysis of Stocks and Commodities magazine. You can actually see the buys and sells getting lower and lower. Showing that we are in a long term down trend. It appears it could be a useful indicator.

The S&P 500 index is much the same as the DJIA. In a trading channel going lower. It should go to 1,360 and then bounce to 1,460 to 1,480 and then lower again down to 1,280. It may turn upward at that point. Also notice the SVAPO and OBV.


The Nasdaq is not in as sharp of a trading channel as the others. I need to look at why the SVAPO looks like it does. Still probably going down lower.


This chart of the Russell 2000 is interesting. It closed below the August low. It may go down even more. Since the Russell 2000 does not have volume associated with it, It appears to continue to go down. Note the Green Line that cuts across the graph and exits about at 800 on the right hand side is a long term trend line channel that started in 2004. I have been watching it carefully since we started to break it in August. And now are 12% below the trend. The uptrend has been broken and now we should be looking to go short.



The one other point to note is the % of Nasdaq stocks above their 50 day, 150 day and 200 day moving average. They are all below the 30%, This is usually a good sign for an upturn in the next 40 days. Look for a break in the channels and then get long till mid January.