Thursday, October 1, 2009
The SHOCK FACTOR today was 10.0 at its peak. Volume ended up down 4 to 1 as did Advances vs Declines. Bear vs Bull formations peaked at over 10.0 today. Thats as high as it gets in relative terms.
What is the GOLD line under Mr Nasty and what does it mean. When might a correction be climactic?
The Gold line is CAPT Namo. Basically a spread oscillator based on Mr. Nasty's component data, and as you can see by the top picture [ also CAPT. Namo], it is about as low as it goes. Thus some relief is in sight perhaps tomorrow, but it could be short lived. The COLOR FACTOR is even, indicating to me, that this is a breather, not the end. Using the Calendar to measure, we had an advance from Jul to Mid Sept. By most measures, half the time to correct would be about a month from when the first SHOCK FACTOR made its debut. The DOW could drop another 1000 points and not change the technical shape of the market trend if it re-bounded and later re-established its trend. Therefore, just when you thought it was safe, it wont be.
However you can count on some Counter-Move relief when CAPT.Namo gets in such an extreme position, positive or negative. Given all that, I am looking for some feeble pressure relief rally now, another dribble down, like dripping water torture, then another cascade mid-month, and finally exhaustion by the end of the month.
CRASH ? No everyone expects one. When did the melt down start last year? Coordinate those anniversaries and watch them ! Keep your powder dry and your stops tight.
This is a result of tighten liquidity and it is therefore taking everything denominated in currency down with the ebb of funds. Physical precious metals will be a buy when and where you can find them for sale in the quantities you can afford.
As derivatives, gold stocks, PM stocks and other precious metal stocks and indexes will decline as the liquidity ebbs away. Once you see MR.NASTY make the upturn, it is likely you will see liquidity flowing back into currency denominated markets.
Tight lines, dry powder and physical specie money are what ya want.