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New Bull Market?


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#11 skott

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Posted 18 July 2009 - 08:13 PM

thanks IYB

#12 inamosa

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Posted 18 July 2009 - 08:18 PM

thanks IYB


Agreed

Don, your posts are always appreciated - and often a breath of fresh air
"Our job is not to predict where the market will go, but to interpret daily price and volume action to ascertain the facts of the current environment and make decisions based on that interpretation."
-Scott O'Neil (son of William O'Neil), Portfolio Manager at O’Neil Data Systems, when asked where the Dow would go in the coming months

#13 Randy

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Posted 18 July 2009 - 08:37 PM

Umm Naz50mma.jpg

#14 da_cheif

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Posted 18 July 2009 - 09:15 PM

predictably ....recognition is creeping into the equation...........it gets tricky trying to climb onto a bull market well after its started.......just when you think you got it figured out the boys pull a swifty on everybody.........the next few days will be fettle testers..........the above chart of the nazdaq is coming out of a clearly defined 2nd wave pullback imo.......the 2000 2002 decline a double zigzag or abc x abc affair......unless of course its the end of western civilization as we know it today.......the months ahead shud be exquisitely exciting...best of luck

Edited by da_cheif, 18 July 2009 - 09:16 PM.


#15 spielchekr

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Posted 18 July 2009 - 10:28 PM

Reports of the bear market death are premature. I'll use IYB's 13 month average to demonstrate, except I'm looking at the 13 month ema instead. An ema virtually flatlines when price tags it... that's one of it's features. That means that last month's 13ema reading is this month's flatline price, and is also the level where this month's price would cross the 13ema. This month, that particular price level is 47.9% above the SPX low of 666.79. Now here's some context: 11/1962: price crossed the 13 month ema 19.1% above the low 01/1967: price crossed the 13 month ema 15.0% above the low 11/1970: price crossed the 13 month ema 23.7% above the low 02/1975: price crossed the 13 month ema 31.7% above the low 05/2003: price crossed the 13 month ema 21.0% above the low All other SPX crosses from price lows had much smaller price spreads than these, and aren't worth drawing attention to. OK, let's dig into the Depression era Dow. 03/1930: price crossed the 13 month ema 45.5% above the low That was four months after a low. Incidentally, we are now four months from the March low. 09/1932: price momentarily crossed the 13 month ema 100% above the low, intra-month, just two months after a low Then came a 70% retracement to the low 04/1933: price crossed the 13 month ema 64% above the retracement of the 09/1932 low, again after only two months. This was also nine months after the 09/1932 low, and it's the cross that held. 06/1938: price crossed the 13 month ema 33.5% above the low, five months after the low Other than that, there aren't any other lows in the same league, or the one just below it, by this measure. I think there's something to be said for IYB's argument that the setup is not there. As traders, you've been trained to ignore the obvious. So the first reaction will be to ignore the best fit with the lows I've described above. But really, was it obvious before just now?

#16 Cirrus

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Posted 18 July 2009 - 11:34 PM

IYB, I do not expect much of a sell off from hitting that 13 month MA.
Looking back 50 years, a decline over -20%, followed by a test of the 13 month MA, has yielded only 1 major sell off vs 7 continuations.

Posted Image

Sure, we may see 880 again this year, but a full fledged 2002 style sell off making new lows is very improbable based off of the simple criteria: a decline over -20%, followed by a test of the 13 month MA.
If anything, I'd say that hitting the 13 month MA should be viewed as a very probably signal (7 to 1 odds) that this is a new bull.




Thanks Moneyfriend...great chart as I have been concerned with Don's dwelling on the previous bear (2000-03) as his example (sample size of 1). I have no idea which way this thing goes but I'm open to either direction.

#17 hitoya

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Posted 18 July 2009 - 11:50 PM

Very nice works from both IYB and MoneyFriend. I have seen more convincing bear posts. MoneyFriend indeed provided with balancing convincing bull posts. This is why we have market. To me, LT is bearish. IT, ST, and VST are all bullish. VST and ST direction can change quickly, so can VST and ST positions.

IYB, I do not expect much of a sell off from hitting that 13 month MA.
Looking back 50 years, a decline over -20%, followed by a test of the 13 month MA, has yielded only 1 major sell off vs 7 continuations.

Sure, we may see 880 again this year, but a full fledged 2002 style sell off making new lows is very improbable based off of the simple criteria: a decline over -20%, followed by a test of the 13 month MA.
If anything, I'd say that hitting the 13 month MA should be viewed as a very probably signal (7 to 1 odds) that this is a new bull.



#18 IYB

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Posted 19 July 2009 - 12:18 AM

Other than that, there aren't any other lows in the same league, or the one just below it, by this measure. I think there's something to be said for IYB's argument that the setup is not there.

Thanks for your post Spiel. You analysis is very much appreciated, because you clearly are "getting it". I keep trying to find a way to explain the concept that bull markets come off of a base- a period of preperation to sustain higher prices. You expressed the concept in terms of percentage that a market has to move to get back to the 13 MMA. I'll try one more time, expressing the concept in terms of TIME to get back to, then thru, the 13 MMA:

If you look at MF's 50 year chart, you will not find a single example, not one, of the market starting from a low or a retest low and then taking 5 months or more to penetrate the 13 MMA and then continuing in a bull market. That, of course, would have to happen here for the first time ever for this "new bull market" thesis to be correct.

IOW, when the market is ready to launch, it does so within maximum 2-3 months off the latest trading low - precisely because it has spent many months PREPARING for that launch, and as Spielchekr explains - it doesn't have that far to go to get thru the 13MMA. Here we are into the FIFTH month and still have not done so- precisely because there is no base - no preperation for the "new bull market". Time and distance both say we were not prepared to launch a bull market for the March 2009 low. That launch point will come in the future, after due preperation --- but we haven't seen it yet.

But I suspect that, once again, I'm preaching to the choir. ;) D

Edited by IYB, 19 July 2009 - 12:23 AM.

“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

#19 MoneyFriend

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Posted 19 July 2009 - 01:13 AM

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#20 laza

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Posted 19 July 2009 - 01:20 AM

03/1930: price crossed the 13 month ema 45.5% above the low

That was four months after a low.

Spielchekr,

Do you have a chart showing that? Would love to see how price behaved right after. Thanks.