Beginning of June update.

The end of April DOW breakout was not confirmed and it's now testing the April 18th low of DOW 12093. If it falls below this level I believe it will drop to 11600. There is support there and it would represent a 10% drop from the May 2nd peak.



>End of Month Update:
>
>4/12/2011 @ close
>DOW 12,263
>S&P 1,314
>NAS 2,744
>RUT 822
>
>4/29/2011 @ close
>DOW 12,810 +4.46%
>S&P 1,363 +3.72%
>NAS 2,873 +4.70%
>RUT 865 +5.23%
>
>Not bad for an untra short-term prediction.
>
>The jury's still out on whether this breakout will be confirmed. For that, we'll have to wait until the end of June.
>
>
>>>>>>Just a friendly warning. The markets are forming a double-top & inverse head & shoulders.
>>>>>>http://finance.yahoo.com/q/bc?t=3m&s=%5Edji+%5Egspc+%5EIXIC+%5ERUT
>>>>>>
>>>>>>This is not yet confirmed but I suggest all investors tread very carefully.
>>>>>
>>>>>How often has this formation been previously identified correctly and subsequent price movements observed, one way or or the other? i.e. where is the real statistical evidence that this has any meaning or ability to predict subsequent price movements whatsoever? Show me where it happened a statistically significant number of times previously with a statistically significant price movement subsequently. Without that information this is an utterly useless exercise in FUD.
>>>>
>>>>I take issue with your FUD characterization, as I am not engaging in fear, nor uncertantity. I am certain that a significant move (+- 5%) is coming in short order (by the end of June) and I suggest being careful not scared. One of those indicators points to a big upside.
>>>>
>>>>I'll leave "real statistical evidence" to the experts. I am an amateur who learns, especially from recent history.
>>>>http://www.wyattresearch.com/article/russell_2000_double_top_dominates_immediate_picture/14279
>>>>
>>>>I posted in the chatter forum, not news. ;)
>>>
>>>No insult intended but if you stick out your neck and make a prediction then you invite ... debate. Without some real statistical evidence it means nothing. Maybe there will be a big move, maybe not. Maybe 5%, may 10%, maybe1%. Who knows? So when we make a prediction we should back up that prediction with evidence. Without evidence then we simply espouse opinion.
>>
>>No insult taken. My initial post was a simple warning regarding common technical patterns which are currently forming on the major US indicies. No explicit prediction included and the implicit prediction was that a significant move was coming, but as was pointed out by Mike, without an understanding of what those terms mean the contradiction of the indicators is lost.
>>
>>My "prediction", posted in a later response, is just that, an opinion. We'll know by May 1st whether or not it was correct.
>>
>>>One thing is for sure, any pattern which can truly predict anything would quickly become arbitraged out of existence and hence useless. That assumes that a pattern can actually foretell the future in the first place; something yet to be backed up with evidence which, as soon as such evidence were provided, would make the pattern worthless as everyone attempts to use it before everyone else and hence changes the patterns predictive value - catch-22.
>>
>>I disagree. Patterns form because of the way institutional investors move money in the markets. Their sheer size, precludes them being nimble enough to be reactionary to patterns. That others use and exploit these patterns has not prevented their continued formation. The markets movement is still controlled by large institutions and they are led by fundamentals.
>>
>>>Also, your certainty means nothing really. That I or you or someone else are certain or not is irrelevant. There are millions of market participants and each time they buy or sell something are certain they are doing the right thing. For every buyer there is a seller and so we express our opinions.
>>
>>Agreed.
>>
>>>Trying to trade the market is based on a hugely dangerous assumption which is that one can consistently and over-time out-trade and out-predict the vast majority of other traders, many of which have far more resources, knowledge, databases, systems, computing power and weight in the market than oneself. Really, can we do that, not just once or twice, calling it right now and then, but do it for 20 or 30 years during our investing lifetimes?
>>
>>I certainly intend to do so. ;)
>>
>>>I hope the market doesn't fall badly - it would make far more people worse off than vice-versa. If it happens then so be it. One's real protection when investing is asset class diversification, sector diversification, geographic diversification, currency diversification and stock-broker/investment bank diversification plus taking a long term view.
>>
>>To be clear I'm not predicting a bad fall in the short term.