I think we rally now to the mid – 900s or 1000, then go down. I guess the bottom happens in the 1st part of 2010.

Good comments – I’ll try to post a daily chart of the stocks you mentioned if I see a good pattern to highlight in them. All eyes are on the Financials and we do expect them to lead the market – it’s good analysis to zoom-in on key financial stocks.

The Cradle Failure occurs when price breaks beneath the confluence EMA support zone – it does happen from time to time. The stop is placed just beneath the EMA confluence and is low compared to the large target should the cradle hold.

It’s up to you to determine your risk-tolerance/preference. You want to try to buy as close to the Cradle as possible, and if you wait for confirmation, you’ll ultimately earn less profit than those who bought into uncertainty. That’s the name of the game though – the balance.

Exactly. That’s certainly a possibility, one that has been forecast since late last year – that of an ABC up to ‘trick’ the people, then more bad news hits the system and plunges it down to a new low. I think a lot of people would be completely turned-off on the stock market… but that’s precisely the psychology we need to form bottoms – not this optimism we have right now.

While things seems so murky a couple of weeks ago, the bullish picture seems to be clearing up, yes. As long as the Cradle Holds, of course. If it failed it would throw us back to a bearish posture.

I’m regarding this move in part to ‘drunken bulls.’ Irrationalities sounds more professional to say!

I’m with you!

BAC: Looks like cradle of 20ema/50ema has completed and looking very bullish
C: approaching cradle point. i am thinking citi will blow away expectations next friday and sky rocket.
GE: approaching cradle point. will probably also beat expectations but not blow it out of the water.

these 3 stocks might be the catalysts for the push to 1000/1100 on the sp500 and i thought its interesting that all 3 are on verge of a breakout (BAC has already begun its breakout)

what if the cradle is a failure? Should we wait for confirmation? Or should we buy on a pullback?