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Bfbusa

DOW Down 50%

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Thats the DOW mini from the 2003 lows that is. I drew that fib line a few months ago. The other fib line you see is the 127 fib extension from the previous rally attempt. I know, so what, but when I noticed it, I thought it was kind of interesting to see how far it fell. Does anyone have an opinion on this.

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When I look at longterm moves I plot the cash index (in this case $INDU) since, back adjusted or not, futures price data beyond the current contract distorts fibs.

 

$INDU is kind of in the middle of 38.2% and 50% retracement, so it is not far off from 1/2 down.

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Hi Suntrader,

 

I agree with you, I saw that too when I drew the fibs for the $INDU. Thanks for the info with the fib distortion, that's good to know.

 

I was just a child back then, but for some reason this bear market reminds me of the 73-74 bear market. Someone described that one as an agonizing sell off and like now, then was also due to, at least in part, from oil. Back then it was the oil embargo.

 

Also, I noticed a pattern developing. If this sell off should reach the 2002 low, we may be seeing the completion of a head in a multiyear head and shoulders pattern. I hope I'm wrong, but what the heck, as a trader I really don't care which way the market goes, I just trade the setups.

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This bear market is much different then anything we've ever been in, it's the worst financial crisis since the depression. There are multiple bubbles that have been building since post WW2. The bright side is the global economy is doing well, i.e oil rich nations, China, India, etc.

 

We'll probably see the end to American economic dominance as no one wants to hold dollars. Theres really no way around that, since our priority has to be to save the banking system. Oh well, life goes on :o

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Another reason to trade the DAX instead!

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Because you can't handle volatility?

 

DAX has far greater volatility than the YM, you know. :doh:

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