Friday, March 13, 2009

4 day rule

If the market can close positive today it will trigger a "4 day rule" possible trend change.

The rule states that 4 days in a row counter to a long intermediate trend often confirms a change of trend.

However the weekly cycle isn't due to bottom until possibly mid to late April or early May. I think it's probable that we get a test of the bottom at that time. That would set up a more sustained rally.

This bear market is going to need to test the 200 day moving average at some point in order to keep investors riding all the way down.

I'm thinking the best time for that would be this summer after the weekly cycle bottoms.

I can hear the media now, rationalizing how the stimulus plan is working, etc. etc. Unfortunately I also expect the stimulus, easy money policies to again spike the energy markets (as I said in the previous post) thus driving the global economies deeper into the depression. Make no mistake this bear won't end until summer or fall 2010 when the next 4 year cycle low is due.

There really is no free lunch!