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MARKET VIEWS .TV INTERVIEW CHART PAGE

The following charts are for reference to the interview of George Slezak by Ike Iossif of Market Views .TV on June8, 2010.

LISTEN

BOTTOM LINE?  

STOCK MARKET COMMENT 6/8/10

I am concerned that this leg of market decline, whether the first leg of a new bear, or the "a" leg of an a-b-c correction of the up leg from March 2009, could get excessively violent in the next few weeks.

Bonds? Rates tend to go lower during violent market declines.

Gold? Gold tends to rise during violent stock market declines.

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STOCK MARKET DISCUSSION

My CURRENT concern is for the potential of a climax of this first leg of decline of either a new bear market or an "a-b-c" type correction of the 14 month up leg, comes from two ideas. 

First, WHAT IS A CLIMAX GOING TO LOOK LIKE IN A LEG THAT HAD A 10% DOWN DAY IN IT'S SECOND WEEK!

And second, past first legs of declines from major tops tend to have their climax around 40 to 60 calendar days after the day of the top.

I use the pattern of the 1929 stock market top as a "model pattern" for any stock market top. I DO NOT expect a market crash in every market top pattern. I do expect the first leg of decline might be it's most violent at the end of that decline.

Following is a calendar day comparison matching the day of the current high in the Dow Industrials to the day of the Dow high in 1929. 

CHART 1

Is the pattern of the 1929 market top really a "model" of market tops? Let's just run through a chart comparison of ALL past market tops in the last 120 years compared to the 1929 market top. If we see a large number of tops with similar patterns, then we need to be "on watch" for the development of the current pattern.

USE THE "PREVIOUS" "NEXT" LINK BELOW THE CHART TO RUN THROUGH 40 PAST MAJOR TOP COMPARISONS

SLIDESHOW 1

 SLIDESHOW 1                                 Previous . . Next . . Reset

USE THE ABOVE "PREVIOUS" "NEXT" TO RUN THROUGH 40 PAST MAJOR TOP COMPARISONS

Before I draw a conclusion, please consider that we may not be at a market top and the above idea that we compare the current market pattern to past market tops to see how the market acted at this stage of the top may not be correct.

Following is one of many chart comparisons that started out looking like a top, with a 30 day low and a 40 day corner, but the top pattern failed and the market leg climbed to new highs.

My conclusion of the above review of past tops to the top pattern of 1929 is the period 40 to 60 calendar days after the day of the top is OFTEN a period of great volatility. Since the current pattern is NOW just past 40 calendar days after the top, AND "IF" WE ACTUALLY HAVE EITHER AN INTERMEDIATE OR LONG TERM TOP, then we should be on watch for increased chaos in the markets in the next few weeks!

Good luck and good trading!

George

Click here for Timer Digest review of Stock Index Timing .com           Click here for managed account information   or Email george@georgeslezak.com  or call 1-888-311-3400

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CLICK ON THE FOLLOWING DATES FOR CHART COMPARISONS OF THE "MODEL" 1929 TOP PATTERN TO OTHER PAST MAJOR MARKET TOP PATTERNS

George Slezak publishes the web sites www.commitmentsoftraders.com (shortcut www.cot1.com ) and www.stockindextiming.com (shortcut www.sit1.com )and www.commodityindextiming.com  (shortcut www.cit1.com ) for a combined monthly subscription of $50 per month.