Shared the chart below with members 3 days ago and on dshort (see post here). How does one define a Crash/Wreck? Does a 50% decline in 5 months qualify? Close enough in my book!
Certain patterns took place in 2007/2008 that led to a “Commodity Crash/Wreck” as the CRX Commodity index declined over 50% from May 2008 to October of 2008.
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I have enjoyed and benefited from the “Power of the Pattern” for the majority of my 31 years in this business. Do know that I gave up a long time ago, attempting to say why these patterns do what they do. I believe the patterns represent “fear and greed,” which are the two driving forces that cause people to make decisions….that is good enough for me! Are things/events/economic conditions the same in 2011 as they were in 2008? No!!! No two time periods are exactly the same…yet can patterns repeat? Yup!!!
Are the patterns in the CRX/Dollar acting the same of late as they did in 2008? I will let you be the judge. My goal is to provide research that can assist investors “to enlarge portfolios regardless of market direction, by using the Power of the Pattern.”
A good friend of mine that has been receiving my noise since the late 1990’s calls the “Power of the Pattern” his 28-second advantage. He shares that he can see what should be done and why in less than 28 seconds. The Power of the Pattern called for a repeating “Great Escape” to start back in May (see post here).
These patterns suggested clear back in May, to protect capital and so far nothing has changed. Let the pattern help you with future pricing, not invest in a reactionary/rear view mirror process.
To me its not about being right (the reasons something is happening), its about making money! Don’t take your eyesoff this pattern and the situation in the Shanghai index! (See post here)