The State of the Trend

By: George Krum | Sat, Jul 30, 2011
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My fear that something positive may come out of Washington and change the natural ebb and flow of the market was grossly exaggerated. If anything, Congress' reaction to the financial crisis in 2008 taught us that one should expect the worst reaction at the worst time. What are the odds that things will be different this time?

The normal retracement usually associated with overly bullish sentiment did follow right on schedule and, according to the same study updated from last week, is fast approaching the opposite extreme.

Political games aside, the weekly and monthly trend remain up although dangerously close to breakdown levels.

The State of the Trend
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The last chart, I believe, reveals the true nature of US financial markets during the last decade and a half: a continuous series of artificial bubble and bust cycles. While the debate over who and what's to blame for that may rage for awhile, the more important thing right now is to avoid getting caught on the wrong side of the next move. Keeping an eye on the support lines above will help immensely with that task.



George Krum

Author: George Krum

George Krum

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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