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Massive Columbus Day Bounce? Topic Rating:
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NutOnABike
Posted : Sunday, October 12, 2008 8:11:35 PM
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Friday, Oct. 10, had the markets in historically extreme oversold levels. Obviously financial institutions, hedge funds, mutual fund redemptions have been selling indiscriminately in the 8 days prior including Friday.  Blood is in the streets.

When was the last time you saw the VIX over 70?  Years, if ever. And we all know readings that high are unsustainable. The New High/New Low ratio is a miniscule 0.15%. Virtually all technical indicators are pegged at zero.

How about a snapback bear rally to the 50% Fibo level? In the DJ-30, if we take the Aug. 11 high of 11800 and Friday's low of 7880, 50% takes us back to 9850.  From the 8450 close that's about an 8% gain, certainly plausible in a high volatility environment. We might also head back up to retest 10,000.

Monday could be really, really good for short-term traders.
awshucks
Posted : Sunday, October 12, 2008 8:38:44 PM
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The bigs sold heavily into the market on Friday.  Be sure you pick you positions properly. (sorry for the alliteration).

realitycheck
Posted : Sunday, October 12, 2008 8:53:24 PM
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I too think we're due a bounce ... but I would think that it would hold below the 10 ema/daily ... which I'm guessing will be a bit below 9500 tomorrow ...

tonymccullough
Posted : Sunday, October 12, 2008 10:46:15 PM
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There has been some discussion of Hedge funds still needing to sell to meet margin calls due Monday.   
signaltap
Posted : Monday, October 13, 2008 5:37:43 AM
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Again, 8,900 is a crucial level of resistance (200/5) for the dj-3,0 if it breaks above that decisively, then it could go to 10,555 (200/60) but I seriously doubt it, because of what happend late Friday (+290 , then died to -128) and the VIX need to break UNDER 61.37 (233/5) in order for me to think going long! Sig
bcraig73450
Posted : Monday, October 13, 2008 11:35:23 AM
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I agree with Sig.  DJ-30 is hanging in at about 8900 (10:25 CDT)

Here is my take on eaistance and support.  The levels are subject to some eyeall placement but are good to whi a small rannge of error.

realitycheck
Posted : Monday, October 13, 2008 12:46:50 PM
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Well ....

We're at 9042 and still climbing ...

What constitutes a "decisivie break" of 8900 ?

bcraig73450
Posted : Monday, October 13, 2008 2:00:22 PM
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My estimate is a close above 9200. 

 This may signal the beginning of a bounce to 9838 or 10779.

I calculate the variability as the square root of the level, eg. SQR(9102) = 94.9.  Then the expected rahge is twice the variability - 2*94.9 = 190.  Then the estimated level for the begining of the bounce is 9012+190 = 9202.

Only my opinion.

realitycheck
Posted : Monday, October 13, 2008 2:27:53 PM
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Wow ... that's some pretty fancy numbers work there ....

I'm just not that smart ....

I'll just stick with thinking that it'll hold below the 10 ema/daily ... without any variability ... astrology ... or numerology ...

bcraig73450
Posted : Monday, October 13, 2008 2:48:29 PM
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A magic wand and some chicken entrails help with the divination .
wisea1662
Posted : Monday, October 13, 2008 4:02:17 PM
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Hi;

Just heard on CNN up 992 points. We just got to fall tommorrow.
Wisea1662
NutOnABike
Posted : Monday, October 13, 2008 5:23:30 PM
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Joined: 12/6/2004
Posts: 48
Original poster here to collect my applause and kudos for calling this rally.

[crickets]

Um, well, that's OK.  It's not like my self-esteem depends on Internet message boards 

hope you made coin today, i did !
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