who thinks this is start of major correction, page-52

RKJK,

I have nothing against charts and TA. Hey, I use them myself for my trading. But we must be clear about something. Charting is simply a mechanism towards a self-fulfilling prophecy.

Take for example your chart where you say if we break below the 5750 trend line, it is doom and gloom. Well, if half of the market participants are using that same chart, and we do break slightly below that trend line, than half the market participants will liquidate their positions and the market will correct even further and faster than last week. Thus a self-fulfilling prophecy.

What will the FA ppl do?? Will they follow suit?? Some will. And some will look at the fundamentals of the world economy and developing markets, the trend of the commodities boom. These ppl will say "fantastic, I can now pick up more shares in what i believe is an undervalued company based on future earnings, even cheaper than last week and the week before".

I'm not saying one is right and the other is wrong, just pointing out the self-fulfilling propehcy of charting and TA.

I for one believe we are still at historical averages for PE ratios. As is much of the worlds markets. One of the main reasons for the China correction last week (IMO) was the new tax system the government wants to bring in to curb the speculative nature of their stock markets. Does this mean the whole fundamentals of the world economy shifted dramatically from the week before?? Not at all. It's good to have corrections in a bull market, as it allows the market time to breath and not over-inflate.

When will we continue the uptrend?? I have no idea....but the dynamics are intriguing nonetheless.

Cheers