StockFetcher Forums · General Discussion · The Unstoppable Rally vs The 50% Retracement<< >>Post Follow-up
265 posts
msg #83929
Ignore trendscanner
12/7/2009 6:19:33 AM

With the market now having reached the 50% fibanocci retracement level from the absolute top in Dec 07 to the Mar 09 bottom, I thought it worth a look back to see what happended during the last bear market recovery.

Link below shows the 2004 50% retracement and current 50% retracement.$SPX&p=M&b=5&g=0&id=p38868734986&listNum=1&a=185042761

After the recovery from the 2001 to 2003 bear market, the SPX reached the 50% fib retracement level in Feb 2004, tried it again in Mar 2004 and couldn't get past it. Took 8 months of sideways action before it made another, this time successful, attempt in Nov.

Wondering if we'll see something similar this time. Unless the market breath indicators show a broader recovery that includes small and mid caps, I'm a little skeptical that it will happen immediately or before end of the year, but I'll adjust the few positions I have open now accordingly if it does.

265 posts
msg #83974
Ignore trendscanner
12/7/2009 7:31:00 PM

Max 2 Year Bollinger Band Squeeze for the major etfs and large caps in progress now, i.e., the difference between the upper and lower BBs (20,2) for SPY, QQQQ, DIA, other etfs and many large caps has reached a 2 year minimum.

* Bollinger Band Contraction */
set{BollingerDiff,Upper Bollinger Band(20) - Lower Bollinger Band(20)}
set{percent, Bollingerdiff / close}
BollingerDiff reached a new 24 month low
and BollingerDiff has been decreasing for the last 5 days
and draw Bollinger Bands(20)
draw BollingerDiff
add column percent

Might see "Blast Off" or "Timber" this week. Maybe a good time for a long straddle.

433 posts
msg #83976
Ignore BarTune1
12/7/2009 8:50:13 PM

Very interesting trendscanner. I have been observing as much the past few days from looking at my charts that track the broad markets.

I completely agree that these markets will likely resolve the contraction one way or another quite soon. I am thinking to the downside as I simply can't see how things would rocket to the upside given the state of the US economy .... at least what I have observed in my travels.

Given the low volitility, it probably would be a relatively good time to enter into a straddle on a couple of the indicies or maybe a high beta stock.

StockFetcher Forums · General Discussion · The Unstoppable Rally vs The 50% Retracement<< >>Post Follow-up

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