Bulls on Defense

By: Joseph Russo | Sun, Feb 17, 2008
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BULLS FUMBLE - First-Down - BEARS
The near 20% decline from peak to trough in the October 2007 - January 2008 period, marked a potentially devastating turnover for Bulls. After throwing a near interception back in August, Bulls held steady, recovered, then fumbled critically at the October '07 highs.

Bears handily took possession thereafter, and have scored an undeniable first-down with the lows hit in January. Despite the aid of statist intervention along with surety of more where that came from, the Bullish contingent finds itself in the very rare and awkward position of playing defense.

Not without a fight
Though Bears may have scored a first-down, they are not very far along in advancing their ultimate campaign. It is likely they are still at their own 10-yard line - with a gargantuan 90-yard battle to win for a touch-down bottom to victory. Not only do Bulls still maintain mountains of steroidal-muscle and influence over the grid-iron at large, but they also have a formidable army of fans and officials working overtime to skew favor back to their collective multi-generational interests. On the other hand, it will be interesting to see the resultant outcome of official's attempts to reflate what has yet to be adequately deflated.

As the above page extraction from Elliott Wave Technology's Interim Monthly Forecast clearly reflects, the time for pro-active traders and investors to have gotten defensive was in the summer and fall of 2007. Going forward, participants may get second chance to get defensive at higher levels, or it may also turn out such that the bullish contingent somehow prevails - prompting us to lift our currently defensive posture.

Gaming the System with Options and Futures
Short-term leveraged trading is a highly speculative endeavor that entails significant levels of risk along with extraordinary levels of reward. To prevail in such an arena, one must not only adopt and stick with a winning discipline - but one must also accept that taking ones share of managed losses is a basic element of such engagement.

Below is graphic summary of previous week's short-term trade-triggers identified via Elliott Wave Technology's Near Term Outlook .

Elliott Wave Technology's short-term market forecasts provide an outstanding roadmap of the dynamic price action landscape five days per week. The Near Term Outlook provides an excellent platform from which speculative short-term traders may better execute their strategies, mitigate risk, and maximize profits.

Short-Term Trading Environment: Week ending 15-Feb.
Ironically, the faster markets traverse amid their expanded daily ranges, the slower the larger degree wave counts take to unfold. As the stakes get higher, the premiums and risk to participate in these moves rises accordingly - and so do the rewards.

Re-Capping last week's trading points:
Following the mayhem and hi-jinks incited by the crisis intervention and emergency rate-cuts some three weeks ago, markets have settled down - albeit in a much larger, more volatile version of its former self.

Sparing the blow-by-blow details of the previous two weeks, our non-discretionary short-term trading discipline has captured over 500 points in the Dow in the week past, recovering most all of the losses experienced earlier in the month.

THE BROAD MARKET UPDATE
We are going to begin this broad market outlook from the value perspective of Gold - one of the last remaining stable benchmarks of equal weight and measure. The chart below translates the value of the Dow Jones Industrial Average when measured against the Gold value.

Should one have interest in acquiring access to our long-term technical analysis and/or utilizing our proprietary short-term market landscapes, we invite you to visit our web-site for more information.

For immediate access to our broad market coverage in all time-horizons, one may subscribe directly to the Near Term Outlook which includes our Global Millennium Wave Quarterly reports, Interim Monthly Forecasts, and ongoing coverage of the short-term Dow, S&P, and NDX five-days-per-week, while issuing near-term updates for the US Dollar, Gold, Crude Oil, and the HUI two times per week.

Trade Better / Invest Smarter...

 


 

Joseph Russo

Author: Joseph Russo

Joseph Russo
Chief Editor and Technical Analyst
Elliott Wave Technology

Joseph Russo

Since the dot.com bubble, 911, and the 2002 market crash, Elliott Wave Technology's mission remains the delivery of valuable solutions-based services that empower clients to execute successful trading and investment decisions in all market environments.

Joe Russo is an entrepreneurial publisher and market analyst providing digital online media solutions designed to assist traders and investors in prudently and profitably navigating their exposure to the financial markets.

Since the official launch of his Elliott Wave Technology website in 2005, he has established an outstanding record of accomplishment, including but not limited to, ...

  • In 2005, he elicited a major long-term wealth producing nugget of guidance in suggesting strongly that members give serious consideration to apportioning 10%-20% of their net worth toward the physical acquisition of Gold (@ $400.) and Silver (@ $6.00).

  • In 2006, the (MTA) Market Technicians Association featured his article "Scaling Perceptions amid the Global Equity Boom" in their industry newsletter, "Technically Speaking."

  • On May 6 of 2007, five months prior to the market top in 2007, though still bullish at that time, he publicly warned long-term investors not to be fooled again, in "Bullish Like There's No Tomorrow."

  • On March 10 of 2008, with another 48% of downside remaining to the bottom of the great bear market of 2008-2009, in "V-for Vendetta," using the Wilshire 5000 as proxy, he publicly laid out the case for the depth and amplitude of the unfolding bear market, which marked terminal to a rather nice long-run in equity values.

  • Working extensively with EasyLanguage® programmer George Pruitt in 2010 and 2011, the author of "Building Winning Trading Systems with TradeStation," he assisted in the development of several proprietary trading systems.

  • On February 11, 2011, he publicly made available his call for a key bottom in the long bond at 117 '3/32. Within a year and half from his call, the long bond rallied in excess of 30% to new all time highs in July of 2012.

  • For the benefit of members and his general readership, he responded to widespread levels of economic and financial uncertainty in the development of Prudent Measures in 2012.

  • He publicly warned of a major top in Apple on October 26, 2012 in the very early stages of a 40% decline from its all time high.

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