Chart and Data View this chart image
Tuesday Morning 8AM Jan 20 2010 Comment for Jan 19 Close: Forecast remains bullish until the S&P reaches the chart Objective at the upper red envelope, now S&P 1168-ish in the table. Monday's sharp rally may be the red Tiny Ts final burst of strength if there is no carry over today.
We need to find a new oversold condition as discussed in Saturday's post which you can read below in the recent posts links.
Tutorial: Todays Chart is an image of my regular chart with the three Short Range Ts that comprise the current Bull market so far. These three Ts are the official T Theory constructions with the Second and Third using the double bottom criteria for locating the center post when the green AD Line makes a double bottom. A byproduct of the double bottom is a main null that occurs right after the projected peak obtained by splitting the double bottom. You can read my prior discussion on the topic by referencing the recent Jan 11 Data post linked below. The main point is that the early November low is an example of the main null of the second Bullish T that must occur at a date = Projected peak date plus the time width of the double bottom. A new main null example will also occur in June since the third T is also a product of a double bottom as noted in that earlier post.
A second point worth remembering is that these Ts satisfy the basic rule that a new Ts center post can not be placed prior to the projected peak of the previous T. It is not unknown that the next T can have its center post only a few days after completion of a old T. In any case the rule is simple but well defined.
A third point to note is that the current very long Short Range T is likely to be one of the relatively odd kind of Ts that start slowly but build strength as the market advances in the right side of the T. When they occur, their finish can be strong. Its a case of the T having to get its time span and projected peak date completed before the fundamentals can justify the long rally phase. So the T starts slowly and develops momentum as the emerging fundamentals are able to justify. The new earnings announcement coming over the next two weeks and the next earnings report in April will eventually set the upside target for this T.
These three observations are key to understanding Short Range Ts which are the most complex form of T Theory. By comparison the 13 AD Ts from 1966 to the present are very much simpler and often just as good for most purposes. I will be posting additional tutorials here as the topics suggest themselves.
Terry
