Fibonacci Financial

Posts Tagged ‘Dow’

Dear Reader,

The Markets have been in a Holding Pattern since late last year.

That’s about to change DRAMATICALLY.

The Stock Market as exemplified by the Dow Jones Industrial Average  (aka: the D.J.I.A.) has been stuck in a trading range roughly between 10,000- and 11,000+.

For the last year the D.J.I.A. trading range market has been forming a potentially OMINOUS Head and Shoulders Top.  This is just a potential until the neck line is broken decisively!

Remember Summer School over a year ago when we first reviewed the Head and Shoulders Formation? If you need a refresher course,

Go here : http://www.fibonaccifinancial.com/financialwarroom/if-bonzo-is-buying-then-you-should-be-selling/

When this neck line in the D.J.I.A. is broken decisively,

I believe we will be entering  a very dangerous period of HYPER-DEFLATION.

The Federal Government’s Plunge Protection Team ( aka the PPT) have been very busy!  With the X-Ray vision provided by the COT (Commitment Of Traders) reports we can see that each time the D.J.I.A. is in danger of breaking down, the PPT  jumps in with tones of money and buys the market. If they loose this game (which I suspect they will a la King Canute) the breaking of the neck line will be even more ominous and meaningful. If all the Fed’s horses (fiat money) and all the Fed’s men (Ivy League Whiz Kids – full of hubris) can support the market – there’s a hard rain coming…..

This has real potential of making the Great Depression of the 1930s look like a dress rehearsal. For some interesting insight into the potential magnitude of this HyperDeflation buy The Great Wave by David Hackett Fisher and read the last chapter. (FYI David is not an economist but he is a Pulitzer Prize winning author/historian).

Go here to Amazon.com and buy it!

http://www.amazon.com/Great-Wave-Revolutions-Rhythm-History/dp/019512121X/ref=sr_1_1?s=books&ie=UTF8&qid=1283634769&sr=1-1

To sum up – It’s time to WAKE UP again. Go to Safety! Don’t wait till the D.J.I.A. breaks the Neck Line at approx. 9500

You may still have a couple of months (till after the election), a couple of weeks or only a couple of days !

DON’T WAIT –  ACT NOW !

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Are Your Assets Allocated Properly ?

And REMEMBER

There are a wide variety of ways to protect your assets and profit from this tidal change ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are EDUCATIONAL and an introduction to my services and DO NOT constitute investment advice.

Remember the my blog post on June 29th?

In “If Bonzo Is Buying Then You Should Be Selling” we learned about how to identify a Head and Shoulders Top. So did the DJIA complete a Head and Shoulders Top yesterday?

Well let’s go through the checklist:

1.  Did the Dow have a strong rally leading into the distribution formation?   Yes!

2.  Did Dow form a head and shoulders top with declining volume on each peak?  Yes!

3.  Did the Dow break the neckline of a Head and Shoulders Top formation by 3%?   ???

Hint: that would require a close of about 250 points below the 8200 neckline – or below 7950.

The Answer is NO because the Dow closed at 8150 – close but NO CIGAR – YET……..

To be continued.  Remember how Bonzo is investing!  Stay tuned 

AGAIN

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

How do we know when

to go against Bonzo (aka: the crowd)

and be a Contrarian Investor?

The Dow Jones Industrial Average is currently providing us with a classic case to use as a teaching tool. 

The Dow is telling us that it most likely will go DOWN.  It is signaling this with a technical formation called a “Head and Shoulders Top“

Before you look at the current Dow chart please read from the classic description in Edward’s and Magee’s Technical Analysis of Stock Trends.  Start with the paragraph below the titled – The Head-and-Shoulders.

Ok, now  please  read one more page and review the sample chart. 

And now the Dow

And how do we know

that the Dow will probably break through the neckline

and enter an intermediate size decline?

WE can get a pretty good idea from the current message being telegraphed to us from the Dow Bullish Percentage Index (aka BPI).

As can be seen on the above chart the Dow has been selling in overbought territory for almost a month.

Watch for a breach of the 8200 Dow level.  If the Dow penetrates the neckline at the 8200 level it will decline much further.

There are a wide variety of ways to participate in this opportunity ranging from the very conservative to the highly speculative.

BUT you need active guidance – Contact Us at Fibonacci Financial.

Do not get the idea that you can trade or make investment decisions from my blog entries.  These are an introduction to my services and do not constitute investment advice.

Beware

The current Bail Out Bubble Rally will probably end in the Jaws of the BEAR !

So Dear Readers, Stay alert when the Dow breaches the 9000 level.

Red Alert!    Red Alert!   Red Alert!

The Commercial Traders started buying the stock market in late march.  Bullish sentiment was at only 5% !  These along with the MASSIVE infusion of Rag Money into the economy and  more cool aid into the punch bowl have lead to the first real bear market sucker rally.  This however will afford many the last great opportunity to get out of the stock market before then next killer plunge.  It will be hard.  The talking heads will be proclaiming the next bull. “No bears are out tonight Father (big ben) killed them all last night”.  BUT be ready to go against the herd and your own emotions.

Will You Be Ready?

Think I’m full of BULL ?  Drop me a comment