[dpaterso]

A very good Monday morning all!!!

Before I 'start' I'd like to tell you about my weekend:

Last week I promised myself that 'if it was the last thing I did on this earth' I would spend some quality time with my son so, came Friday last week, I 'shut up shop' (it was not easy at the time) and we pitched a tent in our front garden and basically 'camped out' until Sunday morning. HIS rule for the weekend: 'NO TECHNOLOGY'!!! FANTASTIC is all I can say. For MONTHS on end I've sat in this chair from Sunday night until Friday night and then had to spend most of the weekend resting (recovering???). This morning: I feel rejuvenated like never before!!! The reason I'm telling you this: sometimes you DO NEED to 'get away' from this and there IS 'more to life' than this!!! 'BALANCE' is 'the key' I think. So when you feel that NOTHING is 'going your way' and the market is 'against you': STEP AWAY!!! You're not going to lose anything by doing this and can ONLY gain!!! These past few weeks have NOT been easy I'll tell you: not for me, not for you, and not for the very best of 'seasoned' traders. I've spent some time taking a look at some other threads around here and I'll tell you that the prevailing conditions are resulting in more than one account 'wipe out'!!! But we're still here and 'alive and kicking' and that has to mean something!!! Something good!!! So 'hang in there' if you can: we WILL truimph in the end!!!

kaalilaatikko:

I have to agree with you. As I said above: these are 'trying times' for us no question. I have NO doubt AT ALL about our trading systems under 'normal market conditions' but the prevailing market conditions are pushing MANY a trading system and trader 'to the limit'!!! The good thing: I strongly believe that any signals we get from here on are going to be reliable ones.

Now ON WITH BUSINESS!!!

Now let me say THIS: JUST BECAUSE I took 'time out' did NOT mean that I could stop THINKING about this business!!! I spent a great deal of time thinking about all sorts of things and the most 'pressing issue' for me is 'where to call the bottom' of these markets if not for any other reason than just to prove that, using a combination of technicals and 'the old man's' 'Delta Phenomenon', it would INDEED be possible to 'call the bottom'.

To see what I've come up with take a look at the chart in the attached WinZip file.

(Before I go on: I KNOW that there are many, myself included 'once upon a time', that 'dismiss' a lot of this stuff as 'mumbo jumbo', but, let's see what happens)!!!

Now on the attached daily chart of the Dow:

I plotted the 'Intermediate Term Delta' or 'ITD'. This tells me that the Dow, 'no matter what', is STILL going down (as I posted in a previous post). The questions are, of course, 'for how long' and 'how low'. I added the monthy Pivot (RTS) Levels onto the chart. At this point I started to see where the ITD intersected with the monthly Pivot (RTS) Levels. Then I decided to add a Fibonacci Fan using the extreme points WITHIN the relevant ITD periods. At first: the extreme HIGH point was a few days later than where it is on the chart now (which oddly enough was the beginning of the first ITD period that concerns us now). The Fibonacci Fan ALMOST 'fitted' but not quite. Then I realised that ITD MUST take into account Saturday's and Sunday's (which I do not have on the charts) so I 'played around' a bit with the Fibonacci Fan and, after offsetting it slightly i.e. to the previous HIGH point, got it to fit 'perfectly' with the price action. NOW I have THREE different levels that intersect at roughly the same points. Last night I had another thought: 'Black Monday' (Monday, October 19th, 1987)!!! I added THAT line to the chart (Monday, October 20th, 2008 because this is the first Monday closest to the anniversary of 'Black Monday' this year). (I know from past experience that for SOME reason or other the Dow 'tanks' on each and every anniversary of 'Black Monday'). Now look at those points of intersection and, while you're doing that, take a look at the headlines on Bloomberg.com or Bloomberg TV noting the 'current state of affairs' this morning!!! It's NO LONGER hard to believe that the Dow can go as low as 9000 this month!!! NO LONGER!!! We could see the Dow at 9837 or even as low as 9566 somewhere around October 14th AND THAT is not 'the bottom' either!!! Moving on from there to the next ITD the Dow has EVEN FURTHER to go. Could we see 9200 and below by Novermber 13th??? I believe so!!! I believe we're not going to see ANY 'light at the end of this tunnel' until at least December 12th!!! Take a look and LET ME KNOW WHAT YOU THINK (if you're interested in this type of thing of course)!!!