Is it(market) a sharp decline followed by a corrective bounce?
(Last Aug/Jan) Or is it more of a corrective 'bull flag'
correction? (Last Nov/Mar)
One interesting pattern seems to be that these types of
corrections tend to alternate. Sharp declines in Aug and Jan were
separated by corrective bull flags in Nov and Mar. Does this
suggest we are in for a more severe decline; one where we may test
the 250 day EMA?
Each of the sharp declines occurred in tandem with broad market
sell-offs and war cries that
'global growth is dead!!'. I haven't heard any of
that this time around. In fact, it's been the exact opposite.
Should that begin to appear in the media, it may present the
beginnings of a corrective bull flag morphing into a sharp
sell-off. But for now, that just is not the case.
One other characteristic is that copper and the Baltic dry index
should lead a decline in a 'global growth is dead' type commodities
correction. (regardless if it actually happens) Copper appears that
it may actually break to new highs (though it did decline
aggressively late last year, and the correction in other
commodities was quite mild) and the Baltic dry index remains at a
healthy level. So currently, I'm inclined to believe that the
current correction will be of the milder bull flag corrective
style, which will consolidate around the 50 day EMA or graze the
150 day EMA on most charts.
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
Using Baltic Dry Index and Copper as INDICATORS
Posted by ameritrader on 3rd of May 2008 at 01:37 pm
Using Baltic Dry Index and Copper as INDICATORS
Check out the following article: A very good review on cooper and Baltic Dry index as good indicators for the market status.
http://www.yuppiepig.com/2008/05/whats-flavour-of-this-commodities.html
Is it(market) a sharp decline followed by a corrective bounce? (Last Aug/Jan) Or is it more of a corrective 'bull flag' correction? (Last Nov/Mar)
One interesting pattern seems to be that these types of corrections tend to alternate. Sharp declines in Aug and Jan were separated by corrective bull flags in Nov and Mar. Does this suggest we are in for a more severe decline; one where we may test the 250 day EMA?
Each of the sharp declines occurred in tandem with broad market sell-offs and war cries that 'global growth is dead!!'. I haven't heard any of that this time around. In fact, it's been the exact opposite. Should that begin to appear in the media, it may present the beginnings of a corrective bull flag morphing into a sharp sell-off. But for now, that just is not the case.
One other characteristic is that copper and the Baltic dry index should lead a decline in a 'global growth is dead' type commodities correction. (regardless if it actually happens) Copper appears that it may actually break to new highs (though it did decline aggressively late last year, and the correction in other commodities was quite mild) and the Baltic dry index remains at a healthy level. So currently, I'm inclined to believe that the current correction will be of the milder bull flag corrective style, which will consolidate around the 50 day EMA or graze the 150 day EMA on most charts.