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I read with interest Jordan’s article before I wrote my editorial and coincidentally it was a subject about which I planned to write but from a different perspective.
I must say I find it irritating to hear news readers – especially on morning TV shows which are watched (and believed) by millions of viewers – say our market is going to fall by a certain amount that day. They are extrapolating from the USA markets and so often are just plain wrong. And they say it with such great authority in their voice. I can also recall one high profile Economist from a major bank who also pronounces - equally with great authority.
As I write, our market is down 17 points after the DOW was up by 92 points. I have a view however that we are going into a short term of divergence – or incongruence. I believe the DOW is going to be benign in style for the short term – range trading if you will.
But I have the view our market is going to head lower:
click to enlarge
It is unusual to see this but it does happen. And I look for some fundamental explanation but I can’t find it.
But I have enough faith in the technicals – especially Elliott to at least take head. It is enough to keep me away from long positions until the scenario unfolds.
Why take the risk?
Enjoy the ride
Tom Scollon
Chief Analyst
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