Heads-up: Time to buckle up
Posted by Frugal on January 7th, 2008
If stock market (S&P500) doesn’t produce a rally of at least 0.6% on Monday, it is highly likely that we will go down by at least 10% or even 20% from here. The right shoulder of the head-and-shoulder pattern is close to be broken. After that, you will hear lots of screaming in the coming roller-coaster ride.
If HUI pulls back somewhat, I believe you should take advantage of it. I’m bullish on gold/silver for pretty much the entire 2008. Besides energy and emerging markets which I am still in the wait-and-see mode (after a correction first), the rest of the market is pretty much junk or toxic.
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January 7th, 2008 at 2:08 pm
Ok, we are officially doomed.
January 7th, 2008 at 5:30 pm
Frugal,
I am an avid reader of your blog (I read it every day), however, this is my first comment post.
I agree with your analysis that the technical layout does not look good on the S&P 500 or SPY. It certainly has formed a head and shoulders and within the last two days, declines on high volume past the neckline. Though, on the other hand, the index has moved into extreme oversold territory (1+ standard deviations below its 50-day moving average). I think we are going to retest those nasty August lows, but we also could trend upward on a reversal of the oversold market.
Also, I think it would be great for both myself and your readers to include a chart of your analysis/trendlines to support your conclusions.
Otherwise, great website, and I always look forward to your new material.
-CP