Corepuncher
Well-known member
It has been only 18 calendar days since the 741 intraday "bottom" and we are already up 24% peak to trough.
2002 - There were two 24% rallies between the first "bottom" and the last real retest. That first period between bottoms took 2.5 months, with the very last retest (didn't get there) took 8 months from the first.
1974 - There was a 24-27% rally, depending on close or intraday. The time between the first bottom and final retest took about 2.5 months.
So, if you base this on history, it should take a minimum of 2.5 months to complete a retest which would mean late January or early February...and may take as long as July if you like the 2002 analog. We have already had our 24% rally and likely not much gas in the tank...GET OUT!
Of course, the bottom retest may not hold either...that is what I am betting on. Did you see the earnings for FEDEX and Texas Instraments? The P/E on TI shot up huge because they slashed earnings. This will become common...and the market will have to adjust in order to not look too expensive. I am almost certain we break the 741 low, test 700, and possibly enter the 600s by fall. A conservative drop to 700 from here, if you sold now, would earn you a nice 30% on the way back up to 910.
Also...I can see a head and shoulders forming (errr, I guess I am predicting one)...right now we are forming the head. The left shoulder was the high of 896 made right after thanksgiving. I believe the head may have room to go into the 930-940 range tops before heading back down to the "neckline" which is 815-820. Then, another try at a push up would bring the right shoulder to 890-900 before failing and then heading down to retest the lows to complete the head and shoulders pattern around 700-720.
2002 - There were two 24% rallies between the first "bottom" and the last real retest. That first period between bottoms took 2.5 months, with the very last retest (didn't get there) took 8 months from the first.
1974 - There was a 24-27% rally, depending on close or intraday. The time between the first bottom and final retest took about 2.5 months.
So, if you base this on history, it should take a minimum of 2.5 months to complete a retest which would mean late January or early February...and may take as long as July if you like the 2002 analog. We have already had our 24% rally and likely not much gas in the tank...GET OUT!
Of course, the bottom retest may not hold either...that is what I am betting on. Did you see the earnings for FEDEX and Texas Instraments? The P/E on TI shot up huge because they slashed earnings. This will become common...and the market will have to adjust in order to not look too expensive. I am almost certain we break the 741 low, test 700, and possibly enter the 600s by fall. A conservative drop to 700 from here, if you sold now, would earn you a nice 30% on the way back up to 910.
Also...I can see a head and shoulders forming (errr, I guess I am predicting one)...right now we are forming the head. The left shoulder was the high of 896 made right after thanksgiving. I believe the head may have room to go into the 930-940 range tops before heading back down to the "neckline" which is 815-820. Then, another try at a push up would bring the right shoulder to 890-900 before failing and then heading down to retest the lows to complete the head and shoulders pattern around 700-720.
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