The Bearish side of the moon

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November 26, 2013
USDJPY new bullish upward move
November 27, 2013

The last couple of weeks I keep on reading on reasons why the market should fall hard and why the recent rise during 2013 is not justified and it has lasted too long. The higher prices rise the more angrily roar ready to celebrate even a 1% corrective decline. It seems that so many people out there still hang on the memories of the 2008-09 decline and combined with all the end of the world scenarios-european crisis fears-war with Iran threats and so many other negative for the market factors the only thing that they manage is to receive all that negative energy right back with their stops being hit. No I do not claim that I don’t make wrong calls when it comes to market forecasting. But at least I know when to believe in my analysis and when to stop being  a stubborn perma bear or perma bull. Dow Jones has recently broken out of a 5 month sideways consolidation range. Do you think that the rise is so soon to be over and that prices are to reverse downwards very fast? For the last 3 years I endlessly find in my way articles about the expected top similar to the one in 2007 and that a new downward move is starting. Don’t even get me started with a prominent Elliottician that still counts the rise in terms of Gold and earns so much money from subscribers who fall for his tricks….Trust meI’ve been there and no money was ever gained from that company’s ambiguous analysis…Yes its ambiguous as one analyst warned about a rally in EURUSD and another analyst waited for a deep correction. But lets not forget our main subject. As shown below Dow has broken out of the sideways consolidation that created 3 tops that only recently were broken upwards.

dow

My view is that the best thing that could happen for bears now is a move towards 15200-400. Prices have broken upwards and I think the longer term trend has nothing to fear as long as prices trade above the 200 EMA and above the pitchfork support. Even this correction is very possible to happen, I don’t see yet any selling signal from the zoomed in daily chart. Prices continue to make higher highs and no support (even short term) is broken.

DOWDAILY

When analysing an index or stock, it is very easy to produce a biased analysis. If the analyst has not taken part in the rally, he would feel that it has gone too far and that prices will need to reverse downwards. The same was the case during the big drop in stock markets during 2008-2009. Many people were stuck on their long views and were looking for all possible retracement ratios where the market would stop the decline and start rising again. What needs to be done is to be flexible and remove those permabear or permabull glasses. The market is always correct…our analysis is not…so if you are stubborn….you will pay. Dow in our case nowadays remains in uptrend and a signal of weakness will come only if we see a daily close below 15800.

Regarding DOW JONES we expect the upward move to continue as long as prices close above 15800. The daily break out of the monthly sideways consolidation is an important bullish sign with longer term implications. For more help trading become a member today.

As always, thank you for taking the time to catch up on my thinking.

A term used to describe a trader (bear) who is expects that a particular asset – be it a commodity, currency or product – to fall in value. The opposite of a ‘bull’.

The idea is that bears attack by getting up on their hind legs and striking their opponents down with their paws, symbolising the fact that they are sellers driving prices down.

Beliefs held by the aforementioned ‘bears’ of the trading world, are described as bearish. Characterised by a generally pessimistic outlook on the state of a given asset, a bearish outlook would suggest that a fall in value is imminent. Opposite of bullish.

Alexandros Yfantis
Alexandros Yfantis
Fascinated by financial markets, studied International Securities Investment and Banking in the UK, works as a Portfolio Manager in Greece and runs a technical analysis website. Enjoys travelling and spending time with his family and preparing for the black belt in Korean Karate.