Thread: Ready For Takeoff ?????

9/12/07 There was a pioneer aviator named Clovis Chapman. He was one of the first men to attempt a solo flight around the world. During his journey, after a brief stop in Fremont, California, he heard the sound of gnawing directly behind him. Clovis realized that a rat was in the cockpit, chewing on a cable. He couldn't leave his controls to catch the rat, but if he did nothing the rat would chew his cables and it would eventually cause the plane to crash, and bring about his death.

But after a while Clovis had an idea. Pulling the throttle back, he caused the plane to rise to 10 thousand feet. Then he rose to 12 thousand feet and he didn't hear the rat anymore. Clovis knew that rodents need a high proportion of oxygen, so he caused the plane to rise where the oxygen was very thin, subsequently the rat died.

A correction is like that annoying rat. In order for the rodent to die, a throttle must be used in order for the plane to fly higher. The throttle regulates the flow of fuel, setting the desired engine power level. The throttle controls the volume of fuel/air mixture delivered to the cylinders. The throttle of the market is volume, and in order for this correction to end, we must see an increase in the regulated flow of volume in order for prices to rise, and this rodent of a correction will end due to lack of oxygen. If the throttle is not pulled back, the rodent will eat through the cables of support and bring a death to the bull market. So if we are to avoid an economic crash, Helicopter Ben Bernanke may have to pull the throttle back next week, which may increase the volume causing us to soar like a plane.

If we are to break this downtrend, volume trends must increase significantly. We still have a chance to resurrect the market, if Bernanke indulges Wall Street. But even if he cuts rates, it may be to little to late for investors, and there's always that nasty 'R' word to be contended with. You know 'Recession.' But elections are coming.