The Quiet Before the Storm

September 27, 2006 –

DJIAdoubletop.jpgLooking at the DJIA and S&P500 charts today, they merit serious caution. Check out the doubletop formations on both. On average doubletop formations are met with a 15% retracing of gains from the line that connects the doubletops. I should preface this blog by saying that I by no means am a technical analysis expert. However, I do perform different kinds of analysis here than the average Joe. I don’t rely too heavily on crunching numbers because CEOs and accountants have been repeatedly outed as liars. And I don’t realy too heavily on technical analysis either because (a) I’m no expert in this; and (b) technical analysis yields many false positives and false negatives.

S&Pdoubletop.jpgHowever, the charts do look ugly. The major factor battling the technical charts from playing out sharp retractments here is the government manipulation of the economy in preparation for the Nov. 7th mid-term elections. So though the SPY has broken out of the double top formation, I by no means would consider this “bullish”. Again the battle between government manipulated lies and the real truth of the U.S. economic state has produced a very “sticky” situation. In the short term, the question is which will win? The mid-term elections is the wild card in the picture. Either way, investors beware!

By the way, sorry Kaeho’s Corner has been absent from the last couple posts, but when I’m posting frequently, Kaeho can’t respond quickly enough. Does anyone out there even read Kaeho’s Corner? Please let us know so I can let Kaeho know if he can post more infrequently!

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