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Making sense of the nonsensical!


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I've been going nutz (heh heh) trying to make sense of the stock markets and nothing, other than the World has gone mad and we should buy buy buy cos it's never gonna drop again, seems to make sense and even that doesn't.  Surely Gordon Brown can't be proved right about no return etc etc. in the end...???

 

So back to the drawing board and throw out all the misfiring ideas (necklines?  Your avin a laugh - more about that on another post though...)

 

So here is what I see and I remain, despite everything, Bearish (you will need to consult the chart below to follow my narrative).

 

This market has been going sideways since 24 Aug 2015, albeit with a lot of volatility and this whipsawing action is death if you get it wrong.  But what if the 20 Oct 2015 high was a "head" in a head and shoulders at a major turn (EW2 - Purple label).  I know, I know, another H&S story but bear with me.  The neckline for this H&S also constitutes a Triangle topline for the rally up off the 11 Feb 2016 low.  If this is in an A-B-C and we are nearing the end of that then a major drop is in the offing, this is what I have been searching for.

 

The neckline has a break and 2 Kiss backs with a third potential (or if you prefer the Triangle has 1-4 hits and a fifth in the making - red labels).  There is massive Negative Momentum Divergence and the Stochastic and RSI are climbing again, will they also make a divergence with price and then fall?

 

The Wave A turned just above the 50% Fib from the 20 Oct 15 high and the recent high was just short of the 76% Fib.  But look at where that 76% fib is!  It corresponds with 2 Daily chart down-sloping tramlines, the neckline/triangle and the underside of the  Fib23% from the Weekly chart.  That is some junction of resistance!

 

If all that works the top of this rally could be in or around 6260, which falls into a strong support/resistance zone since the 24 Aug 15 low.

 

Interested in views.  One way or another we should see whether this is right early next week and if Oil does turn back down then...

 

Here is the Chart:



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All true alas, in my opinion at least there is simply no way out of the mess political engineering, greed and lack of regulation in public capital markets has created that is not itself at first hugely destructive.  I'm sure the people who CAN deal with this already know it too but to do the right thing required bravery and a willingness to be blamed for the destruction, or a wide spread recognition that it has to be done, none of which is in our human nature it seems...  Can you imagine the turkeys (Politicians, Central Bankers, CEOs etc) actually voting for this Christmas?  No, I am sure they either have their heads in the sand or are just hoping the train can stay on the tracks long enough for them to reach their disembarkation station.  This is the only thing that is keeping a big crash, the one we have all been talking about for some time, from happening.  But the market has a way of forcing the issue and I think a lot of the turkeys are going to get caught on the train...

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