INDICATORS
First, the 4 Week High/Low Ratio above is an area where bottoms come from. As you can see, this is near an area where bottoms are made. Yet, price has not dropped with the indicator, yet. I always wanted to begin a sentence and end a sentence with the word "yet," so I can mark that off my list.
Second, but let's look at the same dates on the second indicator chart:
As you can see, we are not near the location yet where we would bottom per the High/Low Ratio chart (except for October 2011, but that was the bottom of a long long sell off in price).
Third, the indicator chart I have been posting shows we are not in the area of a significant low despite the above charts. Here is the chart below.
Fourth, on the percent of stocks above their 40 primary moving average, we also are not at an area where bottoms are made. Here is the chart below.
Fifth, on the Summation Index, we are still at the top of the chart and no where near a bottom. Here is the chart below.
Sixth, here is the McClellan (ratio adjusted) chart which shows we are nearing the lower part of the chart:
PRICE CHARTS
Now, looking at the above, the most likely three candidates therefore (reach your own conclusions) from the above are July 27, 2011 and March 6, 2012 (with April 10, 2012 being the third most likeliest). So, let's look at the price chart:
THE THREE SCENARIOS
Now, taking those three price dates, we can overlay the three scenarios on the price chart. Here are the three scenarios.
What does this tell us? Short term, it tells us that if we break that little red line, we are likely going to get further downward price action to the 1600-20 range. It also tells us there is a chance we could sell like 2011 all the way down to the 1380 area (the back test of the November 2012 low). Long term it tells us that we should get a tradeable bottom somewhere in the 1480-1520 area between August and September, or if we crash like 2011 far lower than that area.
Now, this could just be wrong of course. But the map is there and following the map until it diverges is all I can do. Nobody can see the future. We can just follow the bread crumbs of the present.
IS A HARD RAIN GONNA FALL?
Peace. Om., SoulJester
