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Bear Market Rally 2009 vs. 1930


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#21 inamosa

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Posted 16 August 2009 - 12:38 PM

In my opinion the 1937-42 market is nothing like the current market position, looking at the big picture from an Elliot Wave [Theory] perspective. The 1932 low kicked of the start of a new super cycle bull market after the 29-32 super cycle degree bear market. 37-42 was an ABC correction of the 32-37 wv 1 rally (wv B was a triangle from 38-41 between the A and C impulse waves down). The 37-42 ABC lows held well above the 1932 low.

The 2007-09 move down was a very clear 5 wv pattern in my opinion (just as the the initial leg down in 29 was 5 waves). According to E-Wave Theory, there will be another 5 wvs down to new lows after the current correction has run its course (as it did after the 29-30 correction ran its course). I think the probabilities are very high that this will occur, so our March 2009 low was not the equivalent of the 1932 low as is more like the 11/13/29 low.

The difficulty is determining when the upward correction is complete because there are so many forms corrective patterns can take (zig-zag, double or triple zig-zag, flat, irregular flat, triangle, etc. - 13 types documented under the theory). We are either in a wv 2 or wv B correction of the 5 wv decline from 2007 top, either label implies the same thing: after the corrective pattern is complete, there should be a move to significantly lower lows than the Mar 2009 low. If the current correction turns out to be a flat or a wv B triangle, it could very easily chop sideways until April 2010. If current correction is a simple zig-zag, we will likely be making significant new lows later this year. The next impulse wave down will likely be an extended wave similar to 1930-32 wave, but will likely run longer. The bear market that started in 2007 is likely correcting the entire 5 wave advance from the 1932 lows, so it should take years. A 4-yr cycle low is due in 3rd or 4th quarter of 2010 which should bring prices substantially lower than current levels. I'm accumulating some Dec 2010 puts on this rally for a core short position. This strategy worked well for me in Oct-Dec 2007 period when I accumulated long-term puts for core short. Don't know if it will work this time, but I think the probabilities are there.

Kimston


1929-42 was a secular bear market

The 2000 crash in the Nasdaq was 1929 - and the correlation since between Dow of that time and Nasdaq today looks to be upwards of 70-80%

Secular bear began in 2000. The 1929 crash was also the start of a secular bear - it was not the crash that you saw in 2008. In 2008, we were already 8 years into a secular bear, not coming off a major high like 1929.

Watch this:

Specifically from 3:30 onward
"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

#22 inamosa

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Posted 16 August 2009 - 12:44 PM

Just want to add:

In my opinion the 1937-42 market is nothing like the current market position, looking at the big picture from an Elliot Wave [Theory] perspective. The 1932 low kicked of the start of a new super cycle bull market after the 29-32 super cycle degree bear market. 37-42 was an ABC correction of the 32-37 wv 1 rally (wv B was a triangle from 38-41 between the A and C impulse waves down). The 37-42 ABC lows held well above the 1932 low.


The 2008 low held well above the 2002 low, you just have to stop looking at the S&P and Dow and look at the Nasdaq. The real story is there:
http://www.traders-t...?...st&p=478029
"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

#23 TMN

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Posted 16 August 2009 - 03:24 PM

Just want to add:

In my opinion the 1937-42 market is nothing like the current market position, looking at the big picture from an Elliot Wave [Theory] perspective. The 1932 low kicked of the start of a new super cycle bull market after the 29-32 super cycle degree bear market. 37-42 was an ABC correction of the 32-37 wv 1 rally (wv B was a triangle from 38-41 between the A and C impulse waves down). The 37-42 ABC lows held well above the 1932 low.


The 2008 low held well above the 2002 low, you just have to stop looking at the S&P and Dow and look at the Nasdaq. The real story is there:
http://www.traders-t...?...st&p=478029



since u trade gold as well, i am sure ur looking at the equity mkts in real terns ie vs gold. this could on the one hand support ur scenario as in gold terms ALL equity indices of the western world topped out around 1999/2000. on the other hand, going further back u will be able to see how low the dow/gold ratio can go when stocks are out of favour...

therefore, i agree with milbank. i am in nyc for a few days to visit and they're selling obama condoms on the street, "for hard times" as they say. personally i think obama vaseline would be more appropriate considering my longer term mkt view...

#24 milbank

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Posted 16 August 2009 - 05:13 PM

I still tend to lean towards the Dow vs. Dow fractal scenario possibility I originally posted due to the underlying issues playing out but, the Louise Yamada fractal scenario alysomji has been posting, especially on a technical comparison basis is, very valid and possible. We shall see.

Edited by milbank, 16 August 2009 - 05:18 PM.

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#25 inamosa

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Posted 16 August 2009 - 05:34 PM

I want to add, as I mentioned in that thread linked to earlier (or that was made clear in that thread linked to earlier, if not by me, than by others), that the dates are the most important thing to take away as well as the shape of the fractal, but not necessarily the magnitudes of the movements. What's interesting is Terry Laundry who forecasts tops and bottoms is coming up with dates very similar to the dates the fractal gives when brought into today (see http://www.traders-t...?...st&p=478040 ).

For instance, the next big peak in this cyclical bull based on the fractal would come out to October 25th 2009 - Terry's T-Theory is giving a date of October 14th 2009. Russ is getting dates close to that as well.

The end of this cyclical bull based on the fractal would be around August 17th 2010 - Terry's T-Theory is giving a date of August 9th 2010. Once again, Russ is also getting dates close to these.

This is nothing short of remarkable! I'm pretty amazed.

I wouldn't trade off of this but would keep a close eye on it. If we've been following a fractal for 9.5 years already, that's pretty freaking amazing, and continuing to follow it would be overwhelming but I'm not sure it would be hugely surprising.

But, like I've said before, forecasting and trading are two different things. Put your trading cap back on when you leave this thread but keep the fractal in the back of your head just in case we continue to follow it.
"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

#26 Russ

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Posted 17 August 2009 - 02:58 AM

Alysomji, Yes I have a trend for a peak this mid Oct to be followed by what looks like a big low in March/April, (I have not tried to count it dow to the day on my software yet) this is in agreement with Martin Armstrong's view that the market will put in its final bear low 31 months from the peak in April 2010 which has some kind of Pi relationship. I don't have a signal for Terry's high in Aug.2010 but that could develop as we get closer to that time. My final low date looks to be mid 2014 , which as I have stated here is in rough agreement with Terry's view and also the Kress cycles. The thing that bothers me is that the Pi Cycle Conficence model calls for the low in June 2011... just have to wait an see how it all unfolds.

Edited by Russ, 17 August 2009 - 02:58 AM.

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