We have hit the 1246/45 level on the S&P 500 Index for three times last week. If we hit this level again and if the market fails to go higher, then we probably have a top in place. A reversal of trend and decline should follow. Its a good time to sell, IMHO, contrary to holiday sentiment and dreams of a Santa Claus rally.
Consider this timeless observation from W.D. Gann in 1942:
FOURTH TOP SAME LEVEL. This is something that very seldom occurs, but when a top is made around the same level for the FOURTH TIME and wheat, cotton or soy beans fail to go through this level, it means a big REVERSAL AND RAPID DECLINE.
Source: W.D. Gann, How to Make Profits Trading in Commodities: A Study of the Commodity Market, p. 43 (1942)
Q: Might these market principles apply to the stock market? Human behavior doesn't change, whether one is investing in S&P 500 futures or trading soybeans. Fear and greed reign.
If everyone is positioned for a Santa Claus rally, will the market accommodate everyone? Just something to think about.
Happy Holidays!
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Hi, Thanks for your thoughts, I use several sources for market strategy and have quickly come to highly regard your analysis and explainations as a valuable asset in my market decisions. I have used paid consultants who need to talk to you. Something I have found useful is the TSP Talk web site,of which I'm sure you are aware. Just another source. Again, Thank You,Charley Kutrufis
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