ShepWave Critical Update for Monday Published. Markets to RALLY? OR Time to add to Short Side Positions?
by ShepWave.com
Posted: 2/22/2009 17:21 EST

The other day I was watching a  popular financial station, something I rarely do with the 'sound up', and heard a 'respected' market analyst give a bullish explanation to the recent action that since there were more stocks above their 50 day moving averages with the Dow Industrials hitting new multi year lows then occured with the November (2008) Lows that this was a signal that we are close to a bottom.  Be careful applying this kind of presumptive analysis to the current market conditions.  It could ALSO be true that since the VIX, 50 Day Moving Average Indexes, and the  Bullish Percentage Indexes aren't at their lows of November that the Equity indexes (as well) may not be at or near their coming lows.

The kind of rationalization one  hears on the Television (and other news sources) these days is really frightening.  Another morning recenty I had on the Television and heard a woman from a Mutual Fund company of some sort touting for people with 401K Plans to keep on buying that "they were buying Low".  Again, this is an example of irrational presumptive behavior.  But, in the spokeperson's defense; she probably only makes money IF people keep investing in their 401K or Mutual Plans... regardless if they are going down or not.

Not to recognize at least the possibility that we are going through the 'unwinding' of a 50+ year Credit Bubble is just insane.  Remember that it was almost 80 years ago that the famous Crash of '29 occurred.  The Dow Jones Industrials Index hit a pre-crash high of 381 in 1929.  By 1932 the Dow had sold off to 41.22, the lows of the depression.  It then took until late 1954 for the Dow to regain the high of the pre 1929 crash of 381;that was 25 years (from the 1929  highs) to recover the pre-crash levels.  Keep in mind that that was a 89% drop from the Dow highs prior to the crash of '29 to the lows of 1932.  

Will this scenario repeat itself?  No one knows for sure.  We must maintain our constant study of the charts and wave patterns.  We must also maintain an objective approach to our Investments and 'Trading'.  ShepWave was first developed in 2002 because we saw the coming economic crisis to the U.S. and possibly to the world.  Granted we still had some upside to the markets....but now 'take notice'  the Dow Industrials Index has closed out last week at levels not seen since 1997.  It is probably safe to say that there are a lot of investors who have lost a lot of money getting in during the last phase of the bullish cycle.  Most investors tend to  'get in' at the TOP.   A sad but true fact.

The Regular Scheduled Update for Monday  has been Published.  In it we show some critical targets using the VIX (Volatility Index for the NYSE), the BPNYA (Bullish Percentage Index for the NYSE) as well as some long term charts using Long Term Elliott Wave Theory Analysis for our  potential Mid to Long Term PROFIT TAKING TARGETS.

Go to www.shepwave.com and Log In for Monday's Critical Update.

Remember there will always be 'buying' opportunities; but the trick is knowing when to SELL. The days of 'Buy and Hold' may be gone for some time.

2008 was the 'year of confusion'.  2009 could be the 'year of suffering' for the undisciplined, unobjective investor/trader.  Remember, we can't 'fix' the current economic problem.  While the 'Financial Pundits' are all trying to figure out how to fix the problem our objective is to find the trading range, up or down, and profit from it; taking our piece of the pie.  We as traders/investors can't change the economic situation in this country but there is absolutely no reason not to profit from any market move. 

Click Here to View the ShepWave Published Report from October 11,2007.  When the Dow Industrials Index was still over 14,000.

Click here to read the ShepWave Update from May 26,  The Last week the Dow Industrials Index saw 13,000.

Click here to read the ShepWave Update from August 21 when the Dow was at the 11,400 area. 

Go to www.shepwave.com for Updates.  Trend Analysis, Elliott Wave Theory, Fibonacci Retracement and Fibonacci Extension Targets, Trade Triggers and Targets shown. QQQQ Trade Signals.

 

 Stock Market Technical Analysis.  Elliott Wave Theory,

 

 

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Regular Scheduled Updates Published by Market open on Monday and Thursday.

 Intra Day Updates for QQQQ, DOW,S&P 500 and selected individual stocks most every day.

Our purpose is to not only show potential trade set ups and the management of those trades but to TEACH objective disciplined methods of trading for any time frame.

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