Reply #108: Personally, I Think the Markets are in for a Short- or Medium-Term Rise [View All]

[On the Road]

for the following reasons:

- Seasonality: The end of October is often the low point of the year.
- Psychology: The psychology has become negative. Conventional wisdom is that the market is going down. A majority of short-term investors (not daytraders) have switched to the short side.
- Declining Oil: Even if prices stabilize or rise a little, the worst-case scenarios on which pessimistic forecasts have been made do not look likely in the near term.
- Descending Triangle: Bullish sign.
- Failure to make lower lows: Sign of the end of a downtrend.
- Increased Volatility: The daily ups and downs are striking. It means there's a lot on confusion and the market is in the process of changing it's mind.

The most important reason is that my gut tells me the market is still overvalued and still has a long way to decline. My gut is almost 100% wrong.

And there is at least a 51% chance of this being a good forecast.

on Edit:Oh, and one more thing: the index of leading economic indicators was announced today. It was very bad. But there is so much trading on inside information and rumor that by the time a number like this is made public, the action is almost over.