Blogger was down as I was getting this post done, so now I am out of time.
Hurry Up and Wait
Still plenty of drama today in the markets and every new day brings new calls for "The Bottom". Kid Dynamite has a great post about where things are tonight and I would point you over there:
The Market Does Its Slinky Impression – Desperation Time
With all the wild gyrations over the last few months, a sense of time gets lost. We have had a significant drop that has damaged charts and psychology in a way that will take time to repair. Is this as low as we go? I don't know. What I do know is a rocket ride back to recent highs would be both unlikely and damaging as well. Some ideas on how long a good base may take to form? Here is a simple chart I made to offer as at least a start (my charts suck, if you want great ones go bother ChessNwine ok?). Click for larger view:
To be fair, I am cherry picking the 2009 bottom. The market cracked back in November 2007 and ran down until the boxed area in 2009. Still, the boxed area shows the bottom that was finally built up over 5 months and acted as the springboard for a furious run up.
A more similar example can be seen last summer, and that bottom took 3 months to get resolved (and some FED help as well).
We have been moving down for 2 weeks.
Now a base can form right here, it could form higher up, or lower. A sustained move is going to require some kind of believable support.
So my advice is to hurry up and wait. Maybe grab a Hoodsie Cup and enjoy some summertime:
Have a good night.