Market Update : Where is the bottom?

Where is the bottom is the magical question everyone is asking? Every technician spends a lifetime to figure out a top and a bottom. As of yet, there is no CONSISTENT accuracy in anyone’s predictions out there. Even, W.D. Gann, who was the most successful trader, came up with dates where he said they were POSSIBLE turn dates. He never said they were for sure but said they were possible turn dates. He used other signals around these dates to confirm a momentum change.
Let’s look at the charts and see if we can find some dates where a possible trend change could happen. First, if you look at yesterday’s low, you will see we moved almost the exact same percentage as the last down movement. Also, yesterday’s inter-day low was a Fib value. You can see this on the chart. Therefore, today could be a possible turn date. We have to see how the next two days go before we know for sure if today was the turn date.
Now, let see if we can find some other possible turn dates. Using Gann’s theory, I have two other possible turn dates. These dates are where price and time are squared with each other. Also, I have drawn out the major Fib value (support/resistance values). I have drawn out the price trajectory and it is interesting how the trajectory shows price going to 12519 between 12/5 – 12/10. If today turns out not to be a turn date and the market goes lower, we are going to look at price 12519 and also the dates 12-5 -12-10 as possible turn dates.
As of today, the Dow is still up 2.2% for the year. If you look at the 1987, the worst pre-election year, the market closed the year 2.03% for the entire year. The average for the pre-election year is around 19%+. This year will have to end up positive otherwise the Republicans will have some major problems for the Presidential race next year (opinion).
If I have to guess what will have this year, I think the market will drop down another 200pts and then bounce back up for a bullish pull back for the rest of the year. The pull back will continue into mid Jan and then the market will continue it’s move down. With the 200pt move down, the Dow will be around .2% up for the year. At the end of the year, I believe we will close around 2.5-3.2% for the year.
Time will tell.
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About the Author Manesh Patel