January almost finished - no real change

So the market maintains its rally since New Year, and now in wait mode;

1. Fed
2. China - Trade

Market sentiment (use CNBC!)
Kramer declared bear market over
Bulls are back, supported by view that Fed will not raise or only raise once

but...  even cyclical bear markets last 12-18 months - so far 3 months

Obviously markets don't go straight down, and classic bear market rallies suck in shorts and bulls to believe that the BULL is back..

Charts don't lie
A lot of damage done technically in the autumn fall..

Look at the DOW charts for various time frames


Dow monthly

No real change but updated view with recent price action
still see that the rally has not recovered the broken trend line (rally from 2016)
coincidence? 
the 61.8 % retrace of the 2016 rally coincides with the 38.2 % retrace of the 2008 rally , which coincides with the up trend line from 2008
TOO many coincidences?
IF the market trades towards these "coincidences" looking at DOW around 19k -20k

The weekly and daily are self explanatory.
Bumping against the down trend.
Weekly RSI show clearly the "wait mode"

DOW weekly 

DOW daily

Waiting for the Fed...long day ahead

While waiting for the decision ahead - LONG day - there has been a lot of coverage of the decline since October.  So where is the market?

Is it the start of a long term (Primary) bear market?

Is it a short term correction? (secondary movement - counter Primary trend)

Each Primary trend (up or down) has 3 stages

1. Accumulation (Bull)  Distribution (Bear)

2. Large move

3. Exuberance (Bull) or despair (Bear)

Just going to look at the change from Bull to Bear as the market has been rallying since 2008 

Looking at DOW (headline index) - up over 300% since 2008

The chart shows the (possible 3 stages)

So now it may be the start of the BEAR -

Probably seen or seeing stage 1

1 Distribution

• Smart money notices changes in business climate and start selling stocks
• Public still heavily involved and buying stocks (this is when the man on the street starts giving advice on buying stocks)
• However smart money tends to be larger and stocks start to fall
• Rallies will be strong and give confidence to bulls that the bull market is still strong
• however the rally should not exceed the previous high

Chart show monthly Dow Industrial

The high in February 2018 looks like the exuberance by the public

Reaction high in September looks like the resumption of the bull market ( all forecasts were for new highs and Dow targets of 30,000)

to be continued as the market plays out...

too much , too soon? or too much - too late?

Markets rally 10 % in ONE day !- mainly shorts covering positions, and the fact that markets are SEVERELY oversold SHORT TERM.. - so what does that mean? Mainly that long term investors have not had time to commit "new" money to the market...LONGER term problems have not been solved - expect more volatile trading and possibly one more LEG down..


so what would be ideal ? Another test of the lows and a few weeks trading near the lows - giving time to build a base the (maybe) we can move up over the medium term....

Quick moves like yesterdays are hot air - and when it cools down it all comes crashing down again -


Interest rates cut to 1% in US of A - will it really make a difference? to the main news headlines it will - and MAYBE add a little confidence to the market - BUT in reality the problems we face are caused by too much debt and too few savings...cutting to 1% hardly encouraging new savings! Plus with all the liquidity being given to banks interest rates are effectively already at 1 % or lower - but not to the MAN in the street....