Jordan Craw

The market myths that many people seem to hold as truth often amaze me. One from an Australian perspective is that if the US Market has a down day (overnight in Australia) the Aussie market will finish lower the next day. No doubt a similar belief may be held in the States regarding Australian and Asian markets, though I am sure their movements are far less publicized.

Two names synonymous with Technical Analysis are Gann and Elliott, each having their die hard followers. As in many walks of life, people claim their area of study to be the best. Just look at diets, martial arts, weight loss programs or anything related to some kind of personal improvement. Practitioners of each style or method claim theirs is the best, hands down. The funny thing is most work in a similar manner to the same end. Trading in many ways is no different. I am a fan of the saying, “If it works use it!!”

What was the SEC thinking leading up to July 6th 2007? That is the day when the uptick rule - a rule in place since 1934 to help keep markets orderly - was removed. Famous Investor Lazlo Birinyi has been among those calling for its reinstatement for some time and is now joined by several members of US congress. It’s about time!

In my previous article A Standard Rally from Trading Tutors Newsletter Issue #303, we discussed the current rally in terms of the largest previous rally during this bear market. In this article we are going to look at the lows made over the past 12 months in comparison to significant lows in history.

The current up move that is occurring across many of the major equity indices around the world has many including myself asking, at least rhetorically, how far can it go? A long way if it is the beginning of a new bull market! However, let’s assume for this discussion that we expect some more bumps along the way before a new bull market takes hold.