Tom Scollon

Bad news.

Yes both are falling.  And we don’t know where to.  Well we can talk about probabilities.  But when we see free fall we stand back and can only postulate and review daily.  Unless we are caught out and we need to panic and take action.

Let’s look at the charts:


Click to Enlarge


Click to Enlarge

Well you do not need a Ph.D. in technical analysis to see that neither are in good shape.  If you bought in the heady days of 2008 you would have lost a lot of money.

Both are weekly charts and both show some signs of a rebound in 2015 but this will take time to unfold as paint dries slowly on weekly time frames.

Of course there is a possibility they may recover when they do rebound.  That is they continue higher beyond the wave four bounce.

Another scenario is that before the respite wave four – the wave five lows may first be reached.

The world economy is not in good shape and while analysts try to justify equity valuations I see little depth to the move in the last six years.  And weakness lies ahead.

From my perspective the bounce from the 2008 low was without consolidation.  Mad money going mad.

So I expect that markets generally could retest those lows in the coming year. 

And to all, a happy Christmas and best wishes for 2015.


Enjoy the ride

Tom Scollon