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May 12, 2006

Follow-up observation, Fri., May 12, 2006, 4:44 PM

At 2:22pm, I published my observations. For those who don't believe in timing, let me point you to the arrow on the following chart.


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That's the time I opined that the market was "tired", not worried.

At that point, the Dow had been on a short rally and was down 70 points at 11430, and I suggested that with just over 90 minutes left in this week's trading session, we could even have another -142 point loss like yesterday. I wasn't trying to be exact.

But the market did reverse about two minutes later and closed down -120 points. So let's not split hairs. LOL

Actually it helps to have a Saudi prince read my blog with a passion. (a double LOL)

Here's the deal, just so you don't think I'm some kind of wizard. Well actually I am, but that's another story.

The following chart will show you that the RSI hit 80 for the Dow. It was up there too for the Nasdaq (in blue as a comparative index) and S&P 500 (I can't even guess at that color " maybe green? Brown?). The RSI had that moment turned south " and the time was 2:22, which is a popular mood stabilizer (but let's not get into pharmacodynamics) so I thought " how appropriate: I put my readers on edge with this blog and then slip it to you at 222.

I'll bet you there was not a single person who noticed.

Have you ever noticed how many 3's, 6's and 8's I have in the timing of my entries when I'm in the zone? I refuse to allow 4's there. Four's signify death. I'll rush to beat a 4 by a minute or I'll wait for two minutes if I'm feeling really good. I love 6's.

I recall four of us checking into the Ritz in Paris one time and Rocco's wife says to the front desk, "I absolutely refuse to stay in a room with a seven in it", so I piped up with "Sounds lucky to me; I'll take it". Oh the stories.

And, in addition to the RSI topping out at 2:22 (or a minute earlier), the MACD [a moving average oscillator of the difference between a long-term MA and a short-term MA] also went negative at that point.

That's like watching a cat jump off a 50 story building " you kind of know the end result.

I call it a 444.

Now, if the time and date I had published this particular blog had included a February 13 instead of Feb. 12, I'd really have you spooked.

Posted by Posted by Bill Cara on May 12, 2006 04:44:44 PM | Category: Cara Today in the Market