Nevertheless, the VIX on August 8 rose almost as high as it did during July 2002, on the way to that year’s climactic October bear market low; in September 2001, in the wake of the destructive terrorist attacks of 9/11; or amid the Asian Crisis of 1997 or the Russian debt default and subsequent collapse of the Long Term Capital Management hedge fund in 1998.

Although the market has rallied significantly since early August in volatile trading, the jury is still out on whether we’ve yet seen a final bottom.  Drops to new lows in the stock averages after sudden deep selloffs or outright crashes are hardly unusual, with the most notable example being 1929-32.  A March 2009 trough that followed the 2008 panic was merely the latest:

Probably the best known and most dramatic instance of a crash that didn’t later result in lower lows took place in 1987.  If you were among the intrepid few who bought aggressively near the close on October 19, 1987 (“Black Monday”) or around the next day’s depths and held on afterwards while pundits waited for the other shoe to drop, congratulations; you looked as prescient as you were brave, after the Dow ran up eightfold in the next 20 years.  But you could have done even better by remembering one simple rule: spike lows rarely lead to sustainable V-shaped recoveries.

This means that if you’re fortunate enough to successfully pick a bottom, you likely have nothing more than a potentially lucrative short-term trade rather than an investment worth holding for a durable advance.  Accordingly, you should generally act quickly to take profits in such cases, and then await a better opportunity following a substantial retracement.

New Video: What Are the Implications of the Overbought Condition in Gold and Silver for Investors and Traders?

In this Exclusive new video, we analyze the historical position of Gold and Silver using price data back to 1968 and 1858, respectively. You will see how the 47% advance in Gold between January 28, 2011, and Sept 6, 2011 compares to every historical advance in Gold Prices.You’ll get to look over my shoulder as I conduct our proprietary forensic analysis of these markets, and provide you with our projections. WATCH THE NEW VIDEO NOW >>

Secondary Lows

In 1987, a two-day 17% post-crash jump in the blue-chip Dow Jones Industrial Average was all but dissipated by early December.  No sooner did the Dow fully erase that setback than it again gave back most of its aggregate gain in a couple of weeks in January 1988 (Figure 1).

The Dow this summer has already surrendered the bulk of its accumulated rebound on a pair of occasions since early August.  Yet it would not surprise us to see further serious backing-and-filling going forward.  Such behavior can continue for several weeks or months.  In 1998, a vicious 19% Dow correction concluded with a 512.61-point single-day rout at the end of August, but a modestly higher Dow bottom in early October coincided with a fresh intraday low in the benchmark S&P 500 (Figure 2).  In 1997, the NASDAQ Composite bottomed on Christmas Eve, two months after a culminating 554-point October 27 Dow plunge had triggered trading curbs put in place in response to the panic a decade before, shutting down the NYSE for the first time.  The 2002-03 bottoming formation featured an October nadir and a slightly higher March 2003 low.

This is why the great market historian and trader W.D. Gann steadfastly maintained that the lowest-risk point to enter a market for big gains on the long side is at or near a so-called “secondary,” or higher bottom.

Figure 1: Dow Jones Industrial Average 1987-88

Figure 2: 1998 S&P 500

Rallies Broaden Out

In virtually every precedent we’ve cited, the broad market, as measured by the NASDAQ or other indexes, hit its final low well after the large-cap Dow.  On the way down, people wishing to reduce their exposure must sell what they can.  Often, that leaves only the biggest and most liquid names.  On Black Monday, many market makers for OTC (over-the-counter) stocks wouldn’t even answer their phones.  That left no choice but to sell (and artificially depress) blue chips, which were subsequently the first equities investors felt comfortable tiptoeing back into.  So on “Terrible Tuesday,” as the Dow began to snap back from the prior session’s once-unimaginable 22.6% meltdown by surging a then-record 102 points (almost 6%), the NASDAQ Composite actually suffered its greatest-ever one-day absolute loss.

Once the smaller and more speculative issues bottom out, however, they typically offer the best returns.  We may be witnessing such a pattern here.  Since last month’s respective closing lows, the tech-heavy NASDAQ 100 had nearly doubled the Dow’s 6-½% gain through September 15 in a shorter period of time (Figures 3 & 4).

Figure 3: NASDAQ 100 Cash

Figure 4: Dow Jones Industrial Average Daily

* * *

Conclusion

If you must try to pick a bottom in the midst of a panic, focus on the biggest, most liquid stocks.  Be quick to take profits, and then wait for either new lows or a secondary low.  Once the secondary low is in, you can turn your attention to broader indices or individual issues offering the best growth prospects.

Also, beware of overextending yourself in excessively correlated positions because you may not be as diversified as you think.  For example, with Treasurys widely viewed as a safe haven, if you’re wrong on one half of a long-stock/short-T-bond position, you’re likely to be wrong on the other.

New Video: What Are the Implications of the Overbought Condition in Gold and Silver for Investors and Traders?

In this Exclusive new video, we analyze the historical position of Gold and Silver using price data back to 1968 and 1858, respectively. You will see how the 47% advance in Gold between January 28, 2011, and Sept 6, 2011 compares to every historical advance in Gold Prices.You’ll get to look over my shoulder as I conduct our proprietary forensic analysis of these markets, and provide you with our projections. WATCH THE NEW VIDEO NOW >>

• Stock Market Indices (Equities)
• Bonds/Treasury Notes (Debt Instruments)
• Overall Commodities (Tangible Assets)

What’s Next for the Stock Market?

In this video we analyze the historical position of the Stock Market using data back to 1886. You will see how the recent decline in the S&P 500 compares to every historical correction in stock prices.You’ll get to look over my shoulder as I conduct our proprietary forensic analysis of these markets, and provide you with our projections for each.

You will see how the “Great Cycle” (discovered by WD Gann) has been dictating and dominating what has taken place over the past decade during one of the great wealth building periods of all time, as well as one of the greatest bust cycles in history.

A primary focus of this video is to show you our current projections for these 3 major asset classes (Stocks, Bonds, and Overall Commodities), as well as present the current high reward opportunities that exist right now.

GGF Insiders

If you are not currently receiving email updates when we publish new free content, then I encourage you to sign up.

As a member, you’ll get:

• Frequent articles providing insights on the major markets available nowhere else.
• Timely video updates providing you with up to date analysis and timely forecasts for topics such as crude oil trading,crude oil trading strategies, crude oil trends.
• Invitations to attend complimentary webinars
• Special Reports
• Exclusive offers
• and more…

Sign up below.

In the meanwhile, the biggest story remains the gold market with an advance to another new high.  The current 14% advance during this leg is still modest historically and argues for more upside at a time the XAU Gold Stock Index is knocking on the door to new highs.  A breakout should be imminent and should only fuel the bullishness in gold.

Finally, the bond market should be in an extremely vulnerable position.  We give you our reasoning in this video.

Conversely, the treasury bond market has been experiencing a surge to the upside in line with the 60-year cycle which topped out on August 25, 1950.  In 1950, this was a secondary lower top beneath what had been the final bull market top in May 1946.  If we are in a secondary advance into a lower top beneath the 2008 bull market top, we could experience a sizeable leg to the downside.  In this video, I show you the price charts of this historic pattern.

Please leave your comments below

There is no question in my mind we are in a “live” area in the markets.  And, someone is very wrong!  If you watched the recent webinar presentation, you know our forecast and price pattern analysis declare the probabilities the stock market and energy markets have turning point corrective lows in place.

It is our belief these markets must hold the recent lows.  The implication is we are being given the opportunity to cut our losses and let our profits run.

In the case of the heating oil (crude oil), I show the median historic (average) projected move to the upside.  On the basis of this projection, the risk/reward on long positions would be approximately 10 to 1.

Knowing history intimately enables us to know what targets we are trying to hit.  This enables us to remain patient with a winning position…something which is very difficult for most speculators and investors.

Also in this video, there are two markets which are very intriguing at this time and could be setting up for major short positions.

1. 10-year notes
2. Sugar

In the interest rates, I need to show you what took place 60-years ago…the last time interest rates were at such low levels.

In the sugar, the “crash” off the final bull market highs in February has given way to a sizeable rally.  Based upon the 6 similar bear market rallies in history after comparable crashes, all of the rallies were complete by July 21st.

The question to be answered is whether a price pattern will develop in the October contract which will allow us to enter short positions, with put options a definite possibility.

Since over 1,000 people registered to see this video, I knew there was a heighted level of anticipation based upon many factors, not least of which has been the dramatic reversal higher in the stock and energy markets.  Now, the wait is over. The recording is online. Due to the time-sensitive nature of the presentation, the content of this video will be most valuable to you immediately. Please make an effort to carve out the time to watch this before the end of the weekend, if possible.

In this video, I reveal what W.D. Gann called the ‘law of action and reaction’ and its application to what is taking place in the stock and commodity markets at this time.  I believe the Stock Market and Energy markets are at a unique inflection point, which has culminated in what Gann referred to as a ‘squaring of price and time.’

As you are likely aware, we don’t make hyped up, sales pitch filled presentations. I assure you, this video is not a sales pitch.

If you are a serious student of the markets, I am asking that you indulge me by watching this complimentary video presentation I have just produced.  Even if you have seen other videos or webinars of ours in the past, I can assure you, this presentation on certain market truths with supporting proof will be valuable as well as compelling.

When providing our forecasting as well as trading and investment recommendations, this is an ideal set-up.  If you hold to the philosophy of cutting your losses and letting your profits run, you do not want to miss this forecast which seeks to maximize the risk/reward when speculating or investing in the markets.

Registration Link: Register for the upcoming Webinar at this Page

On June 30th, I produced a video entitled, “The Ideal is for Us to Experience One More Decline in the S&P”.  At the time I recorded that video, my hope and expectation was for imminent and final corrective lows to be completed in the stock market and energy markets as well as overall commodity prices.

I believe this final capitulation low took place as of Monday July 5th. Based upon our research and the arguments I’ve provided subscribers (many of which you are familiar with if you have been watching our videos), indicates today’s surges to the upside have confirmed the start of the next legs up in overall bull markets. The most pointed rationale for my expectations in the markets was provided to subscribers yesterday Tuesday.

WEBINAR

In this brief video, I provide some key information. In addition, you’ll be seeing some historic information available nowhere else which gives me confidence our predictions have a high probability for hitting their mark.

You are invited to attend a live webinar event this coming Friday which will provide you with specific projections relating to the potential upside if the markets unfold according to plan. We will be looking specifically at strategies which can be employed to participate.

Don’t worry, if you can come to the live event, you will have the ability to replay the video at whatever time is convenient for you.

DETAILS FOR THE UPCOMING EXCLUSIVE PRESENTATION

If you have been following us for a while, you know we provide quality, complimentary content on a regular basis.

Occasionally, our forecast for a select group of markets is compelling to the point which we need to present a greater amount of information to you. This is the type of situation we currently find ourselves. As a result, I want to ask you to join me for about an hour while I present our current analysis.

In this brief video, I provide some key information with regard to our current analysis. In addition, you’ll be seeing some historic information available nowhere else which gives me confidence our predictions have a high probability for hitting their mark.

In addition, I’m inviting you to attend a live complimentary webinar event this coming Friday which will provide you with specific projections relating to the potential upside if the markets unfold according to plan.

We will be looking specifically at strategies which can be employed to participate.

Don’t worry, if you can come to the live event, you will have the ability to replay the video at whatever time is convenient for you.

• WEBINAR DATE: Friday July 9, 2010
• WEBINAR START TIME: 11:00 am Pacific time (2:00 pm Eastern)
• LIVE EVENT ATTENDANCE: Register here to attend the live event
• WEBINAR VIDEO RECORDING: Register here to receive the recording on Friday

On Tuesday the stock market traded to within a fraction of our ideal projected low for this “correction”.  Earlier today, I recorded this new video where I provide you with a case for long positions in the S&P 500, should we see the right type of trade action.

As I write these words, the September S&P 500 contract has declined to as low as 1,016.00 in this evening electronic session.  If the current decline to new lows is followed by a reversal higher will issue a major buy signal.

This same pattern has occurred in 25 of the last 28 corrections since futures began trading in 1982.  On this basis, we have subscribers poised to enter both long speculative and investment positions.

Both the S&P 500 and the crude oil have established what should be ideal corrective lows as of May 25th which would be followed by the continuation of long-term bull markets.  Based upon the history of commodity prices since 1900, the time period of the current bull market ranks at #3 out of total of 27 bull markets since 1900.

In light of this, I don’t see any way a final top is in place in overall commodity prices.

SPECIAL REPORT DOWNLOAD

On Tuesday I sent you a complimentary report published by Robert Miner and over 1,700 members went to this page to download it… did YOU get a chance to review it?

Last week I asked Robert Miner, a good friend of mine, to assemble a brief report for you, Gann Global members.  I have admired Bob’s work for many years, and I think this report will give you a taste of the quality of his work.

It’s titled, Two Practical Strategies That Can Give Your Trading Plan the “Edge” Possessed Only By Successful Traders.

Go Download here: How to Acquire the Successful Trader’s “Edge”

Over the past month we have waited patiently in the hope and expectation the S&P 500 would experience a decline to new recent lows. If the double bottom is broken in the September S&P 500 followed by a reversal higher, we will be issuing a buy signal to enter speculative long positions in anticipation of a continuation of the long-term bull market.

In addition, the July heating oil (projected to be the strong sister in the energy complex) is likely in a potentially bullish position.  If the stock market reverses higher, this market should lead the energy complex higher.

Complete Forecasting Package

GGF keeps you on the profitable side of major market moves. You get intermediate-term
forecasting and analysis via Past Present Futures monthly newsletter and Market Scope
Update. You also get your “Opportunity Chasing” services: the High Content Report Videos
and the Position Traders Hotline. We will keep you updated with our position trade
recommendations as well as videos explaining the rationale for trade action and potential
opportunities.

Price: $97 per month

Order: Click Here to Order Now