My Thoughts IV

HenryTo · Posted: Thu Jun 30, 2005 7:18 pm Post subject: My Thoughts IV

Okay, new thread, folks. The DJIA declined below its recent lows today but the Dow Transports did not confirm on the downside - in fact, it is still 90 points away from confirming on the downside.

That being said, a lot of the indicators that I keep track of are still overbought. The equity put-call (P/C) ratio actually closed at 0.51 - one of the lowest readings this year. The market should continue to correct here. I believe the Dow Transports confirming on the downside is now inevitable, and like I said in my earlier email, I also believe the Dow Industrials will definitely close below 10,000 at some point during the next two to three months.

Best,

Henry

HenryTo · Posted: Sat Jul 02, 2005 7:52 am Post subject: nice to see you here again

Gizmo,

Thanks for the charts. I very much believe in the "blow off top" scenario but for that to happen, I think we will need a larger correction first - a correction which we will get the perma-bears (including Jim Cramer - although he is definitely not a perma-bear) all lathered up (similar to Fall 1998 or October 1999) but which will come back to haunt them as the market rebounds from this hugely oversold condition - possibly to new 52-week highs as measured by the NASDAQ and the S&P 500 (and either the Dow Industrials or Dow Transports - but not both).

We will see. There are just too many variables involved so any guesses here may not be too useful. For now, I am relatively sure that the ST correction trend hasn't played out yet - so I am just sitting and waiting and using this time to be prepared to go long at some point in the next three to four months.

Best,

Henry

Gizmo · Posted: Fri Jul 01, 2005 8:34 pm Post subject:

Investor willingness to take risk has not reversed during this decline. My take away is when the down finishes new highs are likely. Perhaps they throw caution to the wind and we set up for your blowoff top. In that case these measures would be contrarian. Notice how all the charts broke down at the March highs? Not now though. Closed my short at Rydex.

http://www.ttrader.com/mycharts/display.php?p=35076&u=gizmo&a=Gizmo%27s%20Charts&id=1154

http://www.ttrader.com/mycharts/display.php?p=35075&u=gizmo&a=Gizmo's%20Charts&id=1154

http://www.ttrader.com/mycharts/display.php?p=35074&u=gizmo&a=Gizmo's%20Charts&id=1154

http://www.ttrader.com/mycharts/display.php?p=35073&u=gizmo&a=Gizmo's%20Charts&id=1154

http://www.ttrader.com/mycharts/display.php?p=35072&u=gizmo&a=Gizmo's%20Charts&id=1154
_________________
Gizmo