44 replies to this topic

[thespookyone]

"Go back and check you will see this over and over and over for as long as records are available. This is what we technichians like to call "a base". Don-Maybe "it will be different this time"? JUST KIDDING!, LOL. All well made points, and refreshing to an old school trader like myself. Thx for all your contributions here.

[nimblebear]

If it was a start of a bull market we wouldn't be asking the question, and this country wouldn't be $20 trillion in debt, and the consumer wouldn't be $14 trillion in debt, and we wouldn't have unfunded liabilities with mediscare and SS at $70 trillion plus. But other than that, nothing would be different.

[Cirrus]

That's where your 7 sentinnels pay of. In this case the indexes are so far below the 13 month ema that should we see a u shaped recovery and a cyclical bull one would miss 1/3 to half of it IMO.

Very intelligent diagnosis & prognostication. If one waits for the index to cross above 13 month,
one has missed a huge part of the advance. Like missing 37% advance from March lows.
Also it is mathematically impossible for the slope of any moving average not to show inflexion
after a 37% advance. It is difficult to see that 13 MA line because of the scale.

When a real bull market starts, it starts from close enough to the 13 month MA, and from a decelerating slope just like in 2003- so that a punch through the MA and an upturn in the MA comes very easily. Go back and check you will see this over and over and over for as long as records are available. This is what we technichians like to call "a base", or the "base building process".

As much as people like to hope - as they did all through the long grinding period of 2001 and the even longer (for the bears) exhausting period of 2002, that "this time it will be a V- bottom!", or maybe I should say fear that "this thing will just go straight up and leave me behind"......markets just don't work that way. They go through cyclical declines, they have long periods of base building, and they eventually punch through and begin the new bull phase-- usually about the time the "too early bulls" have finally thrown in the towel. The same will happen this time. This market WILL build a base over a prolonged period before a new bull market emerges. And that may mean more tests of 666-- or that MAY mean further new lows into the 500's or lower. But it will start a bull market from a base.

What we are discussing here is probably the simplest conceivable tenant of Technical Analysis- and that is this: Is this a bear market or a bull market? If one has a chart right in front of himself and can clearly see that the monthly moving average of price is falling rapidly, and STILL wants to argue that this is a BULL market.....then I don't know why the heck I'm spending my time arguing with him. Over 'n' out.

I actually use the 50wk ema and price above or below an upward or downward sloping 50wkema for my bull or bear market call. Yes, it is still a bear market. I mentioned in earlier posts that I fully expected another IT move down of at least 10% SPX before a bull had a chance to kick off in earnest. That would fix the 50wkema situation. The problem is I think every TA guy that's competent and familiar with market history is probably thinking the same thing.

I thoroughly enjoyed indextrader's post about 6 weeks ago or so about one of those cyclical bull markets in the 1970s...news was horrendous for much of the run and it basically went straight up. I believe he mentioned the bull that started after the 73-74 bear which was nasty....much like this period. If you waited for a 13 month cross and the MA to turn up you would have missed half the bull market. It was a near doubling of the DJIA.

IYB...I mentioned in my post why the 7 sentinells where so valuable. They are sound IT indicators that work often. For me, I trade a lot of groups and individual stocks fromt he long and short side so I frequently find my opportunities outsdie the indexes. I simply use the major market indexes for context and for grabbing on to shorter term quick exposure.

[da_cheif]

>If one has a chart right in front of himself and can clearly see that the monthly moving average of price is falling rapidly,< NAZ 100 200 month ma is rising NAZ COMp 200 month ma is rising as is the 150 month DJ transpor 100 150 and 200 month ma.s are rising DJ 65 COMP 150 and 200 month ma.s are rising NYSE comp 150 and 200 month ma.s are rising RUSSELL 2000 ditto' VLE ditto

[IYB]

>If one has a chart right in front of himself and can clearly see that the monthly moving average of price is falling rapidly,<


NAZ 100 200 month ma is rising
NAZ COMp 200 month ma is rising as is the 150 month
DJ transpor 100 150 and 200 month ma.s are rising
DJ 65 COMP 150 and 200 month ma.s are rising
NYSE comp 150 and 200 month ma.s are rising
RUSSELL 2000 ditto'
VLE ditto

Now you're just being silly Cheif. We all know that the market has trended up over the last 125 years, but that's not the subject of this string. We are talking about the cyclical bull/bear- AKA the primary cycle, AKA the 4-year cycle for want of a better term. Not the Centennial Trend, or the Millennial Trend

[inamosa]

IYB Fantastic posts

[IYB]

I thoroughly enjoyed indextrader's post about 6 weeks ago or so about one of those cyclical bull markets in the 1970s...news was horrendous for much of the run and it basically went straight up. I believe he mentioned the bull that started after the 73-74 bear which was nasty....much like this period. If you waited for a 13 month cross and the MA to turn up you would have missed half the bull market. It was a near doubling of the DJIA.

You couldn't have picked a better example of my point than the one you choose, Cirrus. I was there. The market crashed almost 50% into August 1974 to about 570 DJ (much like 2008-2009), then spiked 40%-50% into October (much like now), then had a full blown retest of the August lows in December- right back to 570 again..... completing a base. Then when it crossed the declining 200 day (or 13 month) in January, the Bull was on- and since the base had broken the steep downward momentum of the MA, it now easily turned up to confirm the bull in early 1975. That's when it made sense to talk about "bull market", not at the October highs.

Perfect example of my earlier explanation.......And I always enjoy your posts, btw. Very Best, Don

[Gary Smith]

I thoroughly enjoyed indextrader's post about 6 weeks ago or so about one of those cyclical bull markets in the 1970s...news was horrendous for much of the run and it basically went straight up. I believe he mentioned the bull that started after the 73-74 bear which was nasty....much like this period. If you waited for a 13 month cross and the MA to turn up you would have missed half the bull market. It was a near doubling of the DJIA.

You couldn't have picked a better example of my point than the one you choose, Cirrus. I was there. The market crashed almost 50% into August 1974 to about 570 DJ (much like 2008-2009), then spiked 40%-50% into October (much like now), then had a full blown retest of the August lows in December- right back to 570 again..... completing a base. Then when it crossed the declining 200 day (or 13 month) in January, the Bull was on- and since the base had broken the steep downward momentum of the MA, it now easily turned up to confirm the bull in early 1975. That's when it made sense to talk about "bull market", not at the October highs. ;)

Perfect example of my earlier explanation.......And I always enjoy your posts, btw. Very Best, Don

Don, I too was around in 1974 and my memory of the end of the 1974 bear market was much different than yours so I looked it up and found this informative link with a chart and then scrolling down some commentary on the bottom.

http://www.fiendbear.com/bear1973.htm

[da_cheif]

>If one has a chart right in front of himself and can clearly see that the monthly moving average of price is falling rapidly,<


NAZ 100 200 month ma is rising
NAZ COMp 200 month ma is rising as is the 150 month
DJ transpor 100 150 and 200 month ma.s are rising
DJ 65 COMP 150 and 200 month ma.s are rising
NYSE comp 150 and 200 month ma.s are rising
RUSSELL 2000 ditto'
VLE ditto

Now you're just being silly Cheif. We all know that the market has trended up over the last 125 years, but that's not the subject of this string. We are talking about the cyclical bull/bear- AKA the primary cycle, AKA the 4-year cycle for want of a better term. Not the Centennial Trend, or the Millennial Trend

then dont fight the trend eh.......looking back.....short sharp declines came and went like the wind in the night.....every bull mkt started asa bear market rally.....6.75 over n outf....and history has shown that thru it all......most have been defensive about the stock market 90% of the time......say it aint so.......:>)

Edited by da_cheif, 20 May 2009 - 07:11 AM.

[Cirrus]

I thoroughly enjoyed indextrader's post about 6 weeks ago or so about one of those cyclical bull markets in the 1970s...news was horrendous for much of the run and it basically went straight up. I believe he mentioned the bull that started after the 73-74 bear which was nasty....much like this period. If you waited for a 13 month cross and the MA to turn up you would have missed half the bull market. It was a near doubling of the DJIA.

You couldn't have picked a better example of my point than the one you choose, Cirrus. I was there. The market crashed almost 50% into August 1974 to about 570 DJ (much like 2008-2009), then spiked 40%-50% into October (much like now), then had a full blown retest of the August lows in December- right back to 570 again..... completing a base. Then when it crossed the declining 200 day (or 13 month) in January, the Bull was on- and since the base had broken the steep downward momentum of the MA, it now easily turned up to confirm the bull in early 1975. That's when it made sense to talk about "bull market", not at the October highs.

Perfect example of my earlier explanation.......And I always enjoy your posts, btw. Very Best, Don

Don...you're wrong here. I made my post while looking at the DJIA weekly chart with a 52wke ema posted on it. Again, you would have missed half the bull run using your technique. Those are the facts.