Meridian Market Theory

By: Erik Swarts | Mon, Sep 12, 2011
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Since floating the Meridian Market Theory in late March - the market has respected the meridian and was subsequently strongly rejected by it. To simply discount this chart as novel and cute in light of the recent market swoon - would be ignoring historical precedent and a possible outline for what lies ahead.

I find it quite interesting that from a structural (price) perspective, the previous two trading environments (1994 and 1987) where the market was rejected by the meridian are quite similar to our current structure. Namely, there was a waterfall decline - followed by a trading range that initially appeared as a bearish continuation pattern - but was in fact just a consolidation before the market returned to the primary trend.

With the daily comparisons to 2008, it should be noted that the primary difference from a structural perspective is the equity markets were working towards resistance - not support. This gives credibility towards my suspicion that once the markets works through the many issues in Europe - the primary uptrend will resume.


Further reading:
Reflexivity Meets Equilibrium
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Erik Swarts

Author: Erik Swarts

Erik Swarts
Market Anthropology

Although I am an active trader, I have always taken a broad perspective when approaching the markets. I respect the Big Picture and attempt to place each piece of information within its appropriate context and timeframe. I have found that without this approach, there is very little understanding of ones expectations in the market and an endless potential for risk.

I am not a stock picker - but trade the broader market itself in varying timeframes. I want to know which way the prevailing wind is blowing, where the doldrums can be expected and where the shoals will likely rise. I will not claim to know which vessel is the fastest or most comfortable for passage - but I can read the charts and know the risks.

I am not a salesperson for the market and its many wares. I observe it, contextualize its moving parts - both visible and discrete - and interpret.

I practice Market Anthropology - Welcome to my notes.

Erik Swarts is not a registered investment advisor. Under no circumstances should any content be used or interpreted as a recommendation for any investment, trade or approach to the markets. Trading and investing can be hazardous to your wealth. Any investment decisions must in all cases be made by the reader or by his or her registered investment advisor. This is strictly for educational and informational purposes only. All opinions expressed by Mr. Swarts are subject to change without notice, and the reader should always obtain current information and perform their own due diligence before making any investment or trading decision.

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