Balance is but a brief transition between extremes.
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Basis: glish & bluerobot
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Thursday, August 01, 2002
SPX Monthly Chart
Some comments about this chart:
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- I've made this chart linear as pitchforks don't make "sense" on semi-log charts (ie, bisecting a logarithmic range isn't particularly straight forward).
- The red fork is a "Modified Schiff" that takes as it's Median Line origin the mid-point of a prior range (rather than the extreme hi or low of that range).
- The range I've bisected is the Sep01 to May02 rally, arguably the most important move since the slide off the 2000 top.
- ADX is indicating a potential consolidation (ie, ADX is topping, DMI- is slightly reversed, and DMI+ is flat)
- RSI is the lowest it has been since 1990 and does not yet show signs of a reversal (note that I am using a 3-month period to capture any shift "sooner")
- August has only just started, so the possibility of going positive to ride the mid-line of that red fork is quite open, as is, of course the more obvious potential of more down.
Looking at monthly charts sent me traveling on the way-back machine where I encountered some of my posts from the height of the bubble, when after a string of stop-losses taking me out of the market told me something was just not quite right. Here are a couple:
A -634 move intraday that was only -75 by the close read that one
Thoughts on profit taking, sell-off, and capitulationread that one
At last, over the rim
of the waiting earth
the moon lifted with
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows