Before the market opened yesterday.
We'll find out if NDD and I are right tomorrow at the close of the U.S. trading day.What NND predicted was that the intraday low on Tuesday would be the low for the week, so the bottom of the current correction had already been created. I agreed with him. The proof of the pudding would be weather the markets continued to rise on Thursday and Friday. They did.
Stocks have soared again after dropping yesterday.
That was yesterday. Reuters has today's news.
The Dow Jones industrial average was up 107.74 points, or 0.97 percent, at 11,251.05, according to the latest available figures. The Standard & Poor's 500 Index was up 4.43 points, or 0.38 percent, at 1,177.07. The Nasdaq Composite Index was up 13.36 points, or 0.54 percent, at 2,506.04.Two days up in a row works for vindicating NDD. Even so, the Dow was down 1.5% for the week.
Also, Tuesday up and Wednesday down does look like a dead cat bounce.
Hat/tip to cieldumort on LiveJournal for this image.
The past two days up, though, looks like the start of what I expect to be the right shoulder of a head-and-shoulders formation, indicating that the high in late April was indeed the top of a two-year bull market. First, the classic head-and-shoulders formation from Investopedia
Next, the S&P 500 since 2000. Pay attention to the far right of the graph. The left shoulder formed in early 2010 when the index couldn't break through the 1200 level, then declined below 1100. The head formed early this year when the S&P 500 rose above 1300, then declined gradually at first, then precipitously.
If this is the start of the formation of a long-term head-and-shoulders pattern, then the S&P should rise to about 1200 this year before declining to 1100. After that, I make no guesses. After all, I'm just an amateur.