Friday, October 31, 2008
Thursday, October 30, 2008
Overly Strong Reactions Are Often Overreactions( zt Quantifiable Edges)
If you left 10 minutes early on Wednesday you missed a lot. The S&P lost over 3% from 3:50 to 4pm and was down over 4% before bouncing in the last minute. I looked back over the last 25 years to find other times the market dropped 3% or more in the last 10 minutes of the day. This was the 1st. Lowering the requirement to 2% unveiled 3 instances. They are listed below along with the next day’s performance:
10/19/87 – S&P rose 5.23% the next day.
9/29/08 – S&P rose 5.27% the next day.
10/27/08 – S&P rose 10.79% the next day.
This is too small a sample size to use for analysis, but a nice illustration of a simple adage. An overly strong reaction is often an overreaction.
10/19/87 – S&P rose 5.23% the next day.
9/29/08 – S&P rose 5.27% the next day.
10/27/08 – S&P rose 10.79% the next day.
This is too small a sample size to use for analysis, but a nice illustration of a simple adage. An overly strong reaction is often an overreaction.
Wednesday, October 29, 2008
Monday, October 27, 2008
Sunday, October 26, 2008
Wednesday, October 22, 2008
Bear (zt Brain)
OK, the market’s headed south. What next? You need to be able to balance your natural sense of hope with the reality of what a chart is objectively telling you and learn to respect the destructive power a downtrend can exert on your equity if you choose to fight the trend. In addition, if you are uncomfortable with selling short, or opposed to it for some personal reason, you will be at a severe disadvantage during a bear market.
Picking bottoms is the hardest job on Wall Street, and frankly, nobody rings a bell at the market bottom. Yet for some reason there seems to be an attraction to declining prices among most participants. Natural human optimism and learned behavior of hunting for bargains in a retail environment provides a “slope of hope” along which stage four stocks decline, crushing the dreams and finances of bewildered longs in its path.
We have all experienced the helpless feeling of searching every news source for a shred of bullishness to justify holding onto a stock in the face of declining prices. This fruitless action only delays the inevitable recognition of truth. It does not delay your losses. It is said that “it is better to be in cash wishing you were in a stock than it is to be in a stock and wishing you were in cash.” This is perhaps never truer than the point at which you are “foraging” for a reason to continue on a course that offers little promise.
For long participants, the stage 4 decline is marked by two brands of fear:
-Fear that the stock’s descent will continue to wipe out their equity (a good fear to have as it may portend a proper action into cash).
-Fear of feeling stupid for selling “the loser” at a point just before the stock turns higher (a bad fear to have). Do not fall prey to the short-term pauses in a primary downtrend; the short term action will typically be resolved in the direction of the larger, more powerful trend of the longer timeframe.
For short sellers, greed plays a role in a declining stock as they salivate at the increasing equity of their account balances. Short sellers are not immune to fear in a primary downtrend. Short term rallies can come suddenly and quickly in a downtrend and the fear of evaporating profits motivates short sellers to buy. There seems to be a general mistrust of the shorting process and, as such, they are often very quick to cover their positions at the very first sign of any short-term strength.
I tend to be very quick to cover short positions because some of the strongest rallies can occur in a downtrend. Holding a short in the face of such an advance can lead to quick and dramatic losses. I would rather cover my position with a profit and stand aside during short-term, and often violent, rallies and then re-enter the position as the stock begins to weaken again. It is my experience that short-term counter trend moves in a primary downtrend can occur so suddenly that trading short is more difficult than long.
Because of the greater volatility in a bear market, shorts generally should be traded more aggressively than longs would be in a bullish environment. When a stock experiences the short-term declines that a short seller targets, there can be terrific opportunities for profits as bids thin out from market makers unwilling to take meaningful inventory and from fearful long holders liquidating in a panic mode.
For a stock in a confirmed downtrend, the rallies are generally feeble, low-volume moves that quickly fail as more frustrated buyers come to the realization that a bottom has not been found. A weak stock is similar to a boxer who continues to stand up to his opponent after repeatedly getting knocked down. The stubborn fighter will ignore the chant of his trainer to “stay down,” much the same as buyers keep coming back to the stock hoping to catch the bottom. These participants ignore the shouts of the market to stay away. Yes, the market does “shout” to us, and the screams are represented by the declining moving averages. When a stock experiences a short-term rally, it finds a renewed source of supply at a level which is lower than the last time the sellers took control; this action is represented by the lower highs on the chart. And, of course, a lower low is created as long holders sell out in disgust as they realize they were unable to correctly make their purchases at “the low.” See how interconnected this all is?
Picking bottoms is the hardest job on Wall Street, and frankly, nobody rings a bell at the market bottom. Yet for some reason there seems to be an attraction to declining prices among most participants. Natural human optimism and learned behavior of hunting for bargains in a retail environment provides a “slope of hope” along which stage four stocks decline, crushing the dreams and finances of bewildered longs in its path.
We have all experienced the helpless feeling of searching every news source for a shred of bullishness to justify holding onto a stock in the face of declining prices. This fruitless action only delays the inevitable recognition of truth. It does not delay your losses. It is said that “it is better to be in cash wishing you were in a stock than it is to be in a stock and wishing you were in cash.” This is perhaps never truer than the point at which you are “foraging” for a reason to continue on a course that offers little promise.
For long participants, the stage 4 decline is marked by two brands of fear:
-Fear that the stock’s descent will continue to wipe out their equity (a good fear to have as it may portend a proper action into cash).
-Fear of feeling stupid for selling “the loser” at a point just before the stock turns higher (a bad fear to have). Do not fall prey to the short-term pauses in a primary downtrend; the short term action will typically be resolved in the direction of the larger, more powerful trend of the longer timeframe.
For short sellers, greed plays a role in a declining stock as they salivate at the increasing equity of their account balances. Short sellers are not immune to fear in a primary downtrend. Short term rallies can come suddenly and quickly in a downtrend and the fear of evaporating profits motivates short sellers to buy. There seems to be a general mistrust of the shorting process and, as such, they are often very quick to cover their positions at the very first sign of any short-term strength.
I tend to be very quick to cover short positions because some of the strongest rallies can occur in a downtrend. Holding a short in the face of such an advance can lead to quick and dramatic losses. I would rather cover my position with a profit and stand aside during short-term, and often violent, rallies and then re-enter the position as the stock begins to weaken again. It is my experience that short-term counter trend moves in a primary downtrend can occur so suddenly that trading short is more difficult than long.
Because of the greater volatility in a bear market, shorts generally should be traded more aggressively than longs would be in a bullish environment. When a stock experiences the short-term declines that a short seller targets, there can be terrific opportunities for profits as bids thin out from market makers unwilling to take meaningful inventory and from fearful long holders liquidating in a panic mode.
For a stock in a confirmed downtrend, the rallies are generally feeble, low-volume moves that quickly fail as more frustrated buyers come to the realization that a bottom has not been found. A weak stock is similar to a boxer who continues to stand up to his opponent after repeatedly getting knocked down. The stubborn fighter will ignore the chant of his trainer to “stay down,” much the same as buyers keep coming back to the stock hoping to catch the bottom. These participants ignore the shouts of the market to stay away. Yes, the market does “shout” to us, and the screams are represented by the declining moving averages. When a stock experiences a short-term rally, it finds a renewed source of supply at a level which is lower than the last time the sellers took control; this action is represented by the lower highs on the chart. And, of course, a lower low is created as long holders sell out in disgust as they realize they were unable to correctly make their purchases at “the low.” See how interconnected this all is?
Monday, October 20, 2008
A "PUT" on the US Government: Chart One of Three Important Charts (USB)
Chart is actually in the previous post.
October 19, 2008
by J.D. Rosendahl
There are three important charts we should all keep our eyes on, and the first of those three is the 30 Year UST Bond. Why? It's on the verge of a large correction!
The chart above is the weekly chart of the 30 Year UST Bond over the past 10 years. This chart reflects 2 bearish indicators. First, we have a failed break out to the upside during the 3rd quarter of 2008, and a quick reversal back under resistance. Secondly, we have bearish divergences on both the MACD and RSI, and both have rolled over heading downward.
Above is the monthly chart of the 30 Year UST Bond over 28 years.
1.
Most secular bull markets in any asset usually have a dominant trend line that is obvious to all to see. The 30 Year UST Bond market definitely has a strong trend line for the past 28 years.
2.
Notice how the peaks in MACD and RSI have declined on each consecutive new price high in the bond market. That's classic bearish divergence on a grand scale over 28 years. That is a bearish sign for the price of the long bond.
3.
These three lines represent the Fibonacci retracement levels. Price levels we should expect to see before the correction in the long bond is over.
Technical Summary: The bond market is displaying some early warning signs of a correction coming in the long bond price. A possible false break out, bearish divergences in the MACD and RSI, and the MACD on the monthly chart is about to turn down and cross over. The signs are early warning signs simply because the massive trend line has yet to be broken.
POSSIBLE CAUSES FOR DECLINING BOND PRICES
1.
The first possible reason bond prices might fall is from foreign governments selling their US Treasury Bond positions. Some foreign Governments have very large UST Bond portfolios, and they could sell these assets to diversify their reserve holdings, or sell on a lack of faith in the US in general, or because they might need to support their own problems at home and want to raise liquidity.
2.
The US Gov't. That's right, we have serious problems here at home, and the federal government could issue 30 year bonds to fund the money they are going to pump into our system in an attempt to hold up our economy. That new potential supply would adversely affect bond prices.
3.
Lastly, in the recent financial damage, raising liquidity is becoming important, and hedge funds, mutual funds, pension plans, etc. could sell UST bonds to raise liquidity, or sell UST Bonds to take gains that they can net off stock losses. Lastly, some investment houses might short the UST bond and buy government backed toxic paper as a pair's trade.
Summary: To cause a correction in bond prices of a large size as I expect, bonds in volume will need to be sold while demand diminishes. It's been my experience that chart/price patterns usually lead the news, so I expect the correction in bonds to start before we find out why. I expect the smart money is selling now before we break the massive trend line, and when the price of the long bond breaks below that trend line that will trigger technical selling, and as we approach the 200 month moving average and below we will see panic selling.
FINANCIAL IMPLICATIONS
1.
The first implication of declining bond prices is higher long rates. Bonds and rates have an inverse relationship. As bond prices come down the yields on those bonds will go higher.
2.
As long rates go higher, the cost to borrow money especially on homes will go higher. A great deal of the mortgage market rates are set off the 5 and 10 year UST bond yields, which will trend higher with the 30 year bond yields.
3.
As mortgage rates go higher the cost of home ownership related to financing will rise, and thus should place additional downward pressure on real estate values. Just what we need now!
OTHER POSSIBLE IMPLICATIONS
The UST bond market is so large, and the popping of this bubble has possible global implications, which include the possible start of global protectionism between countries, the loss or diminish of the US as the premier global leader or financial power, and a possible rejection of the Western lifestyle in general.
INVESTMENT OPPORTUNITY
Lastly, I look at a lot of charts, and I feel this chart provides an exciting investment opportunity, which is the short of the UST long bond or the purchase of an inverse long bond fund. I currently like this trade more than any other I see, because the bond market has limited upside of $5-10 in my mind and possible downside of $10-30. That represents a 2:1 and up to 6:1 reward to risk opportunity for your investment dollar.
Currently, the bond market sits right at its 50 month moving average, and a breach of that area should send the bond market down to again test its massive trend line. A break below that is the confirmation that the trend is over and a larger correction is underway. Shortly there after the bond market should test it's 200 moving average, which on the bond market is about 101, or a about a 10 percent correction from current levels. If we correct down to the Fibonacci levels the correction will 2-3 times that, and provide very strong returns.
So, if you ever wanted to own a PUT on the U.S. Government this is your opportunity!!!
October 19, 2008
by J.D. Rosendahl
There are three important charts we should all keep our eyes on, and the first of those three is the 30 Year UST Bond. Why? It's on the verge of a large correction!
The chart above is the weekly chart of the 30 Year UST Bond over the past 10 years. This chart reflects 2 bearish indicators. First, we have a failed break out to the upside during the 3rd quarter of 2008, and a quick reversal back under resistance. Secondly, we have bearish divergences on both the MACD and RSI, and both have rolled over heading downward.
Above is the monthly chart of the 30 Year UST Bond over 28 years.
1.
Most secular bull markets in any asset usually have a dominant trend line that is obvious to all to see. The 30 Year UST Bond market definitely has a strong trend line for the past 28 years.
2.
Notice how the peaks in MACD and RSI have declined on each consecutive new price high in the bond market. That's classic bearish divergence on a grand scale over 28 years. That is a bearish sign for the price of the long bond.
3.
These three lines represent the Fibonacci retracement levels. Price levels we should expect to see before the correction in the long bond is over.
Technical Summary: The bond market is displaying some early warning signs of a correction coming in the long bond price. A possible false break out, bearish divergences in the MACD and RSI, and the MACD on the monthly chart is about to turn down and cross over. The signs are early warning signs simply because the massive trend line has yet to be broken.
POSSIBLE CAUSES FOR DECLINING BOND PRICES
1.
The first possible reason bond prices might fall is from foreign governments selling their US Treasury Bond positions. Some foreign Governments have very large UST Bond portfolios, and they could sell these assets to diversify their reserve holdings, or sell on a lack of faith in the US in general, or because they might need to support their own problems at home and want to raise liquidity.
2.
The US Gov't. That's right, we have serious problems here at home, and the federal government could issue 30 year bonds to fund the money they are going to pump into our system in an attempt to hold up our economy. That new potential supply would adversely affect bond prices.
3.
Lastly, in the recent financial damage, raising liquidity is becoming important, and hedge funds, mutual funds, pension plans, etc. could sell UST bonds to raise liquidity, or sell UST Bonds to take gains that they can net off stock losses. Lastly, some investment houses might short the UST bond and buy government backed toxic paper as a pair's trade.
Summary: To cause a correction in bond prices of a large size as I expect, bonds in volume will need to be sold while demand diminishes. It's been my experience that chart/price patterns usually lead the news, so I expect the correction in bonds to start before we find out why. I expect the smart money is selling now before we break the massive trend line, and when the price of the long bond breaks below that trend line that will trigger technical selling, and as we approach the 200 month moving average and below we will see panic selling.
FINANCIAL IMPLICATIONS
1.
The first implication of declining bond prices is higher long rates. Bonds and rates have an inverse relationship. As bond prices come down the yields on those bonds will go higher.
2.
As long rates go higher, the cost to borrow money especially on homes will go higher. A great deal of the mortgage market rates are set off the 5 and 10 year UST bond yields, which will trend higher with the 30 year bond yields.
3.
As mortgage rates go higher the cost of home ownership related to financing will rise, and thus should place additional downward pressure on real estate values. Just what we need now!
OTHER POSSIBLE IMPLICATIONS
The UST bond market is so large, and the popping of this bubble has possible global implications, which include the possible start of global protectionism between countries, the loss or diminish of the US as the premier global leader or financial power, and a possible rejection of the Western lifestyle in general.
INVESTMENT OPPORTUNITY
Lastly, I look at a lot of charts, and I feel this chart provides an exciting investment opportunity, which is the short of the UST long bond or the purchase of an inverse long bond fund. I currently like this trade more than any other I see, because the bond market has limited upside of $5-10 in my mind and possible downside of $10-30. That represents a 2:1 and up to 6:1 reward to risk opportunity for your investment dollar.
Currently, the bond market sits right at its 50 month moving average, and a breach of that area should send the bond market down to again test its massive trend line. A break below that is the confirmation that the trend is over and a larger correction is underway. Shortly there after the bond market should test it's 200 moving average, which on the bond market is about 101, or a about a 10 percent correction from current levels. If we correct down to the Fibonacci levels the correction will 2-3 times that, and provide very strong returns.
So, if you ever wanted to own a PUT on the U.S. Government this is your opportunity!!!
Sunday, October 19, 2008
Warren Buffett: "Buy American. I am."
Warren Buffett (The New York Times): "Buy American. I am."
"The financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.
"So ... I've been buying American stocks. This is my personal account I'm talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100% in United States equities. "Why?
"A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation's many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.
"Let me be clear on one point: I can't predict the short-term movements of the stock market. I haven't the faintest idea as to whether stocks will be higher or lower a month - or a year - from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.
"A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30%. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor's best friend. It lets you buy a slice of America's future at a marked-down price.
"Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.
"You might think it would have been impossible for an investor to lose money during a century marked by such an extraordinary gain. But some investors did. The hapless ones bought stocks only when they felt comfort in doing so and then proceeded to sell when the headlines made them queasy.
"Today people who hold cash equivalents feel comfortable. They shouldn't. They have opted for a terrible long-term asset, one that pays virtually nothing and is certain to depreciate in value. Indeed, the policies that government will follow in its efforts to alleviate the current crisis will probably prove inflationary and therefore accelerate declines in the real value of cash accounts.
"Equities will almost certainly outperform cash over the next decade, probably by a substantial degree. Those investors who cling now to cash are betting they can efficiently time their move away from it later. In waiting for the comfort of good news, they are ignoring Wayne Gretzky's advice: 'I skate to where the puck is going to be, not to where it has been.'
"I don't like to opine on the stock market, and again I emphasize that I have no idea what the market will do in the short term. Nevertheless, I'll follow the lead of a restaurant that opened in an empty bank building and then advertised: 'Put your mouth where your money was.' Today my money and my mouth both say equities."
Source: Warren Buffett, The New York Times, October 16, 2008.
Thursday, October 16, 2008
Monday, October 13, 2008
Saturday, October 11, 2008
Friday, October 10, 2008
Today's market review
Today looks very encouraging to me at least.
First time in a week, we did not get a sell off at the final hour.
SPY long DOJI.
TIME：exactly 1 year from the last highest point.
One more thing, today's volume is highest in history for all indexes.
First target, 9100-9200 on INDU and 970 on SPX, where are the 5 day EMAs on 5 min chart.
First time in a week, we did not get a sell off at the final hour.
SPY long DOJI.
TIME：exactly 1 year from the last highest point.
One more thing, today's volume is highest in history for all indexes.
First target, 9100-9200 on INDU and 970 on SPX, where are the 5 day EMAs on 5 min chart.
Thursday, October 9, 2008
熊市可以抄底
关于抄底，说说我的看法
我是喜欢抄底的，9月OE抄底，两天1000点。
周一下午抄底ALL IN，周二早上出几小时搞了500多点。
昨天下午2：15抄底，2；45割肉，平均亏了大约80点。
今天1：00又炒，到3：00抄了300点。
DOW平均一年能涨多少点？
其实，抄底不是错，关键是错了要及时cut。不能心存侥幸，DT变成ST，ST变成股东。
share我割肉的两个简单指标，5分钟图上20EMA和RSI，还有就是重要支持阻力点。
还有就是不要贪心，有300点的利润之后就算没有反转迹象，也要rotate出一部分cash，以备不测。
抄底的入场时机也是非常重要，下午1：00，2：15和3：00是通常几个重要的点，结合前面盘整情况和分钟图上120EMA。通常入场的时候，我希望看到2分图上能出现50点的bar。快速拉起。
我是喜欢抄底的，9月OE抄底，两天1000点。
周一下午抄底ALL IN，周二早上出几小时搞了500多点。
昨天下午2：15抄底，2；45割肉，平均亏了大约80点。
今天1：00又炒，到3：00抄了300点。
DOW平均一年能涨多少点？
其实，抄底不是错，关键是错了要及时cut。不能心存侥幸，DT变成ST，ST变成股东。
share我割肉的两个简单指标，5分钟图上20EMA和RSI，还有就是重要支持阻力点。
还有就是不要贪心，有300点的利润之后就算没有反转迹象，也要rotate出一部分cash，以备不测。
抄底的入场时机也是非常重要，下午1：00，2：15和3：00是通常几个重要的点，结合前面盘整情况和分钟图上120EMA。通常入场的时候，我希望看到2分图上能出现50点的bar。快速拉起。
Wednesday, October 8, 2008
Crazy P/E Ratios(zt)
The average 2009 estimated P/E ratio for stocks in the S&P 500 is 11.9. Currently, 48% of stocks in the index have an estimated P/E of less than ten. Below we highlight stocks with the lowest estimated P/E ratios in the S&P 500. Either earnings estimates are still way too high, or many of these stocks are trading at values of a lifetime. Just looking at the top three stocks on the list (GNW, X, CF), even if their '09 earnings come in at half of current estimates, at current prices their P/Es would still be less than five.
Monday, October 6, 2008
Sunday, October 5, 2008
Bail out week
1.Should not DT on Mon and Fri. Should know they are extremely violate days.
2.Thursday and Friday, typical sell on news, but I tend to wishful think. Idiot.
3.Tuesday, Sep 30. Index Option expired day and Quarterly window dress day. No surprise to see some recover after a 778 sold off day on Monday.
4. Thursday, clearly the trend is broken from the open!
5.Friday, at 8:30 non-farm payrolls were reported -159K vs. -71K, but the unemployment rate stayed at 6.1%. The index futures shrugged off the news and continued to move higher on expectations of passing the "bailout plan" in the House.(This reminds us how news is dangerous for trading,only chart matter.)
=====================================================
This week has to go down in history as the week that was, or at least one of them. After the three page Paulson plan was rejected, Congress worked diligently for a week to put together a plan that was acceptable. The market waited patiently and closed last friday at SPX 1213. Over the weekend both party leaders suggested they had put together a "bailout plan" that would be voted on in the House on monday. The market opened unchanged, but then immediately started to sell off as it sensed the vote would fail. It did! And the SPX dropped 107 points (8.8%) in one day. Congress went back to work. By close of business wednesday the market had rallied back to 1161, up 5% from mondays close. That night the Senate passed a reworked bill, and the market sold off anyway on thursday. Then friday the market rallied back over 1150 awaiting the vote in the House. When the House also passed the bill, which was later signed by the President, and is now law. The market sold off and made new lows for the downtrend, SPX 1098. For the week the SPX/DOW dropped 8.4%, and the NDX/NAZ dropped 11.6%. The biggest weekly drop since 911. (from ELLIOTT WAVE)
Saturday, October 4, 2008
Three charts about index
熊了这么久，weekly RSI第一次小于30.看看2000年大熊RSI小于30发生了什么吧。2000年有四次，我们这才是第一次。第一次都快到了1070这个61.8%的回调！
任何有意义的底部，三大指数必须同步。
从这个意义上说，7月那个真算不上一个有效的底，顶多是个fininace的底！
这个明显的positive divergence！spy上看，是个bullish wedge！
Friday, October 3, 2008
Wednesday, October 1, 2008
RETRACEMENT TARGETS FOR SPY(zt Murphy)
RETRACEMENT TARGETS FOR SPY... If the 5-day EMA for SPY breaks above 120, it will be time to start thinking about some upside targets. However, keep in mind that the ETF has yet to actually reverse the current downswing. Tuesday's recovery was impressive, but strong follow through is what separates knee-jerk reactions from sustainable rallies. Even with a break above 120, I would still consider the long-term trend for SPY down. Chart 9 shows the 5-day EMA for SPY over the last 16 months. This chart captures the bear market thus far (October to September). The blue Fibonacci Retracements Tool extends the length of the first decline. Notice that the counter-trend advance retraced 50% of this decline and met resistance near broken support (yellow area). The red Fibonacci Retracements Tool extends the length of the second decline (thus far). A 50% retracement of this decline AND a move back to broken support would extend to around 128–129 (orange area). If the second counter-trend advance is anything like the first, then the target around 128–129 seems logical. Unfortunately, the market can be anything but logical! Think about this one for a moment. We have 34 days until the presidential election. If the last 34 days are anything like the next 34, we are in for one heck of a ride.
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