Looking in the rear view mirror at the year now past, it seems truly amazing that we got through it. The emotions were running so high during the first quarter. In January, many thought the worst was over, but we knew it wasn't. In late February and early March, several market commentators were calling for Dow 4000. Then, as the rally accelerated out of the low in March and April, few believed that it would last. There was the head and shoulders top that wasn't in May and June. We saw a breakout above the January highs in the SP500 and the Dow in July, but few believed it would last. We were looking for a top the last 4 months of the year that has yet to materialize. And here we are today with new rally highs in the major indexes.
All in all, I think I called it fairly well in 2009 with a few hiccups toward the end. The following are a few excerpts from my 2009 posts:
Tuesday, February 10, 2009
Looking at the Dow, I see the two primary targets at 6400 and 5000, based on fibonacci extensions and long term moving averages. I really don't think 5000 is likely, so 6400 is the most probable bottoming area. (The bottom was 6469.95.)
Monday, February 23, 2009
No Rally = Climax In The Making. The lack of a rally today and the subsequent break of the 2002 lows in the Dow probably means that a climax selloff to complete wave (5) down is underway.
Tuesday, March 17, 2009
This market seems to want to go up regardless of any other considerations and the Qs made a 3 week high today adding to the growing list of buy signals.
Monday, April 27, 2009
One thing seems to be clear to me with each passing day: the rally from March 9 is not over. JNPR staged a powerful breakout above its downtrend line today. That is not an indication of a market ready to roll over. HANS broke out strongly yesterday as well. AMGN rallied after a poor earnings report. I shorted AMGN(half-position) on Monday at 46.00 with a stop at 51.00. I thought that it would fall apart today after the action last night. If it continues higher Monday, I may reverse and go half long. This is bull market (rally) type behavior. (I am still long AMGN. It hasn't gone anywhere, but it hasn't broken down either. The upside target is 75 to 82.)
Thursday, May 28, 2009
It's just hard to get too excited about the upside when we are at the end of the month, and so many factors point down into mid-June.
Friday, June 26, 2009
Regardless of a possible deepening of this correction. I still stand by my statements from April and May that the risk in this market is to the upside. Any shorting should be done with that in mind in terms of position sizing and targets.
Thursday, July 23, 2009
I will not be selling this correction, but continuing to manage positions and looking to add at support levels.
Friday, August 28, 2009
If Terry Laundry is correct, the rally in the SP500 should terminate around October 15. We should remember that in 2007, the Qs kept going for another 3 weeks after the SP500 topped. There is no reason to believe that won't happen this time too. So we have the makings for some volatile action, and there is no way to know which outcome will prevail.
Friday, September 25, 2009
Elliott Wave International has called the top of primary wave 2. This means that under their interpretation, primary wave 3 down is underway and will be a devastating decline lasting more than a year that will bring the major indexes down far below the 2009 low. They may be right, and if so, it will be the first time that they have had three successful market calls in a row since I have been following them... My view is that this is simply a minor correction in a still ongoing rally.
Wednesday, September 30, 2009
My long term view remains the same. After a correction to complete the 10 month cycle, we will see new rally highs in 2010.
Friday, October 30, 2009
The point is that the correction has a lot further to run and we can't know what the ultimate target for this correction really is. (Oops)
Tuesday, November 17, 2009
If, on the other hand, markets begin to consolidate next week rather than decline in earnest, the bearish near term case would be severely compromised.
Thursday, December 17, 2009
What I have been pretty clear about is that I do not believe that yesterday's high was the top of primary wave 2 and that this is the start of the dreaded wave 3 armageddon in stocks. A low should be seen in January that will be the last best buying opportunity for some time, in my opinion.
Perhaps that low will be in February or March, but the conclusion remains the same: it will be the last significant buying opportunity of the rally. Today's action appears to be wave i & ii of 3 of (5) in the Qs. The SP500 appears to be headed for its measured move target of 1158. We should see the rally continue for a few more days to complete wave (5) before the largest correction since June gets underway with a probable target in the 40 to 41 zone for the Qs. At this point there is no need to jump the gun on new shorts. We need to let this thing run out of gas first. We will have to see one of the following to conclude that wave [A] is over: 1) a completed 5th wave, 2) a clear 5 wave decline from the high, or 3) a move below the December 17, 2009 low.
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