Thursday, October 20, 2011

Review of the 10/4/11 Low

I keep getting questions if I think the flash crash Low is still out there. Interestingly,  many are still looking for a huge crash as bearish sentiment remains rampant.

Let's review where we are exactly.

10/3 Solar CIT was the 10/4 Low as expected

I was initially looking for a couple of days rally, but amazingly bearish sentiment remained strong, despite the powerful straight up rally. I posted  this privately: "Bearish sentiment remains extreme for the last 5 weeks, which suggests limited declines, like the 10/4 Low and sharp rally phases since."  

On this public blog in the comment section I posted this on 10/9-10: "There was a 29 week/139 TD Cycle that bottomed on 10/4/11 Lows." and "There are just too many Bears around the October Crash Phobia month, which might delay any big declines this month."

I got further confirmation when I looked at the 75 week cycle as the more accurate 360  trading day cycle and saw it pinpointing the Low as the 10/4/11 major Low:

 The 75 week flash crash cycle = the 360 TD Cycle:
04/14/00L -358- 9/21/01L - 369- 3/12/03L -359 – 8/13/04L- 1078 (3X 360 =1080) – 11/21/08L-356-4/26/10H-364-10/4/11L,  11/21/08L + 720 (2 X 360) = 10/4/11 Low exact!

Other reasons for an 10/4/11 major Low was posted on the Raj T&C private Blog as well: 

10/4/11 Low was the Low for October 2011 as it was:
1. The 75 week/360 TD cycle was the 10/4/11 Low
2. The larger 22 week Cycle bottomed on the 10/4/11 Low: 9/2/09L -22 wks-2/5/10L-21wks-7/1/10L-21.5 wks-11/29/10L-22wks-5/02/11H-22wks-10/04/11 Low.
3. The 29 week cycle Low: 7/8/09L-2/5/10L-8/27/10L-3/16/11L-10/4/11 Low
4. The Master cycle Low was the 10/04/11 Major Low.
5. Squares from 4/26/10H + 23^2 = 10/07/11 was the 10/4/11 Low
6. The NDX 66 week Cycle (click on chart to enlarge) since 3/24/00 High, bottomed on the 8/9/11 major Low and saw a retest higher 10/04/11 Low.

Finally on 10/13 I posted the details on the flash crash cycle and mentioned: 
"The 10/4 Low at 1074.77 SPX certainly qualifies and could have been the Flash Crash Low. Due to excessive bearishness, any crashes could be delayed in this October Crash Phobia Month."   "Please note, some of the 525 CD/75 week flash crash cycle Lows were major Panic Lows, like the 4/14/00 Low, 9/21/01 Panic Low and the 11/21/08 Banking crisis Low, although some were not all that "flashy", like the 3/12/03 Low and 8/13/04 Low, but still they were major Lows."

This 10/4/11 was not flashy, but it was certainly a Major Low.

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