actio-et-reactio
Balance is but a brief transition between extremes.
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Thursday, August 01, 2002
SPX Monthly Chart
Some comments about this chart:
- 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 oneThoughts on profit taking, sell-off, and capitulation
read that one
At last, over the rim
of the waiting earth
the moon lifted with
slow majesty
till it swung clear of the horizon and rode off,
free of moorings
- Kenneth Grahame,
The Wind in the Willows
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