Monday, March 02, 2009

Flying Colours

Well, you can't ask for more. The market delivered today. But it has some way to go. I was happy with 69XX, but 67XX was a bonus. Now, how long must we wait for the near-term bottom? If you play your cards right, you can take a 15% gain (or double with margin) on your money if you call the bottom right. 6000 can go to 7000 in a sucker rally the way 7500 went to 9000 before the new downtrend started. Watch for it.

You DOW the Math

The all time high on the DOW was 14015.

Once it established a downtrend, it sank down to 12796. After a rally, it headed south again, rebounding off 11635 - down 9%.

Then, it established a support at 11732 before putting together another rebound. Once that gave in, the new low was 10828 - 7.7% off the previous support.

Then, without setting a new support level, it rallied a bit and then collapsed all the way down to 7883 - 27.2% off the previous low!!

Then, it set a new support level of 7449 before launching another rally. Considering we're already down 8%, and have taken out crucial support levels from 10 years ago, we're probably looking at a 20% drop from 7449. So 6k it is. Childishly simple.

That's More Like It

Another sacred day. But, what's this about the US T-Note bubble? I know one guy who made a bomb buying puts on oil has shorted the US T-Note. But, did you also know that looking at the price trend of the T-Note is very hard? Try it and let me know.

What should you buy? MGEE - utility company, that, I believe, serves mostly residents in Wisconsin. See how well the support has held up. You can't go wrong here. Or so I think. Have I? Not yet.

But we still have a ways to go. We need BRK-A to crack 50k and BRK-B to crack 2k. That's just the beginning for the buying to start again.

6971 was the 1997 low that people were eyeing. We've achieved that. Next is 6356. Let's hope we don't have to wait too long. That's it for 97. 96 has 6236 waiting in the wings. Why do I want to go low? Because things have to get worse before they get better and it's better that we get the worst out of the way instead of dragging things out.