Friday, January 2, 2009

Point & Figure Targets...

Here is a series of computer generated Point & Figure charts that show recent breakouts and price objectives. You can view these charts by looking at the gallery view here:

These latest targets are all pretty much consistent with one another. The targets are a little higher than I would think, especially with the financials and REITS not leading – but both do, however, have bullish targets showing as well. These P&F charts have the DOW targeting 10,400 and the S&P targeting the 1,070 area. That area is consistent with a 61.8% retrace of the last down wave, but I’ll be surprised if they make it over the 50% retrace level which would put the S&P just a little over 1,000. We’ll see, these P&F diagrams are pretty good at identifying support and resistance levels as well as breakouts and breakdowns.

The CRB was up big today, but has not produced a breakout, although oil and natural gas have. REITS have produced higher targets and SRS now has a price objective of only $36! That’s quite a rout from the nearly $300 level it was at just a little over a month ago. That’s exactly why the leveraged ETFs are not buy and hold.

Please keep in mind that this is likely wave ‘B’ up/sideways that we’re experiencing. It should last for a little while into the new year, but I do not expect it to last much longer than that – please view my Predictions for 2009 if you haven’t already.

Please click on the chart to enlarge:

S&P 500


Wilshire 5,000




SRS (2x inverse REITS/IYR)





USB (candlestick long bond daily chart showing gap fill)