Wednesday, September 23, 2009
Downside Shock Factor = 2.0
For your interest I include two charts. ONE of MR. Nasty and the two RED Markers that landmark two SHOCK FACTOR Days. The first is an Shock to the upside on May 26th, when the total number of Positive formations outnumbers the negative ones on a daily basis by a factor of 4::1. Note that the Upside Shock Factor 5/26 the Red marker line ends up in the OVERSOLD brown section of the Commodity Channel Index, a low area. At that time the DOW was 8200 about. Now move forward in time to Today, where the Red Marker line finds itself in the GREEN clearly overbought section of the Commodity Channel Index. Today the NEGATIVE SHOCK Factor was 2.00, or half the positive SHOCK Value of May, and the DOW Stands at 9900 to start off the day.
That was a 1700 point run after POSITIVE SHOCK FACTOR #1, with a value of plus 4.00.
Today we had a NEGATIVE SHOCK FACTOR with a value of negative 2.00 We had 1700 points up after the first one. My call would be based on that simple math of giving back up to half the gain. As with my BOTTOM CALL on March 9th, I will not make anything conditional. I call this a TOP, in all forms of measurement, and saw we entered the CORRECTION, not a crash, TODAY.
A quick look at liquidity says it also has topped and therefore, I expect the gold stocks, if not the metal to give ground in the same proportion. Therefore in combination with the General Market dropping, and liquidity falling, I expect the US Dollar to rise, as well, as potentially Interest Rates [ Interest Rates I will call conditionally for a rise, pending further DD on my part.
The market could waffle here a bit, but this is the top as far as I am concerned.
I will be tightening up my stops and only buying the most specific of issues, thinking Nat Gas here, but we shall see when PEAK PERFORMANCE PICKS are published tomorrow.
Till then, keep your powder dry and your vigilance high.