14 replies to this topic

[OEXCHAOS]

My big take away is that many longer-term folks are looking at the S&P and presuming that we broke and are thus likely to see lower prices. That may well be a big hook. I've learned about big TA hooks from Stig. Like breaking a rising wedge to the upside. (Bullish). I applied a like concept to that "Head and Shoulders Top" in July. This one does explain a whole lot, thus far. Nice work, Stig.

[IYB]

Really nicely done, as usual Stickan. Thanks. My perspective comes to the same conclusion, btw- that just as 1965-1982 was a "secular bear market" where the market stays range bound and valuations, participation in general, and speculation declined markedly, so, too, is this period of 2000 to perhaps 2016-2018 likewise a secular bear market, range bound with shrinking valuations and participation, and like 1974, 2009 may mark the mid point. As I view it, just as 1982 marked the final low before the next 18-year long (generational) secular bull market began which saw valuations and participation greatly expand and indices increase by a multiple of 10-20, so, too, will the next secular bull market follow the final low late next decade to and expand to perhaps 100,000 or higher on the DJIA in that next super cycle. And just as 1974's lows marked the mid-point in that secular bear market of 1965-82, so, too, will the 2009 low likely mark the mid-point of this secular bear. Thanks for the great TA! Best regards, D

Edited by IYB, 26 September 2009 - 03:58 PM.

[IYB]

Really nicely done, as usual Stickan. Thanks. My perspective comes to the same conclusion, btw- that just as 1965-1982 was a "secular bear market" where the market stays range bound and valuations, participation in general, and speculation declined markedly, so, too, is this period of 2000 to perhaps 2016-2018 likewise a secular bear market, range bound with shrinking valuations and participation, and like 1974, 2009 may mark the mid point.

As I view it, just as 1982 marked the final low before the next 18-year long (generational) secular bull market began which saw valuations and participation greatly expand and indices increase by a multiple of 10-20, so, too, will the next secular bull market follow the final low late next decade to and expand to perhaps 100,000 or higher on the DJIA in that next super cycle.

And just as 1974's lows marked the mid-point in that secular bear market of 1965-82, so, too, will the 2009 low likely mark the mid-point of this secular bear.

Thanks for the great TA! Best regards, D

Just to clarify, while 74 marked the lows in the major averages, 1982 marked the lows in valuation and participation (PE, price to book, speculation and the rest) and thus marked the end of the secular bear. So, too, may, I believe, 2009 mark the low in the averages, while lows in valuation and participation will likely come around 8 years from now- at higher nominal levels on the averages (but lower valuations) than were seen this year. Just my view.

[Islander]

Technical analysis can cover any period of time to suggest potential movements. But the potentials are realized in the same time frame as the TA analysis (long term in this case). No fault there. But is the perspective realistic? Many meta markets folded inside each other? The potential moves may come over decades. Most traders live and work in lesser spans of time, many of us make our money in one leg of a mega move. I recall several swings in the 60's and 80's that ended badly, but ******* the money I made on the way to the bloody end (not all ended badly for traders). The scope of your analysis reminds me of a Kondratieff analysis covering 56 years more or less from start to end, virtually a life time.

[Stickan]

The scope of your analysis reminds me of a Kondratieff analysis covering 56 years more or less from start to end, virtually a life time.
[/quote]

That's one way of seeing it and then the analysis is more or less useless.
Another way of seeing it, is to focus on the possibillity of a break down failure of a size we have never seen before. And knowing what happens after a failure, and knowing that thechnical analysis works in any timeframe, it will explain why this market is behaving like it is and why we probably will not have an October crash this year.
Consider this chart; a chart with a seasonal index (blue) on SPX from 1950.
Time is running out on a bottoming crash and the we are entering the best season for stocks in the year.
If my failure theory is correct, which the steep rise from March 2009 suggest, we will pure gasoline in this fire this month.
And it started today.....
A 120 minute chart of spx shows that we have broken an inverted H&S patter, inside this megaphone pattern, or Descending Broadening Wedge, as Bulkowsky calls the pattern. http://thepatternsite.com/dbw.html
In his book he suggests an average rise of 46% and 40% of the patterns resulted in a rise of over 50%
There is a failure rate of 37% though.
But so close to the main supportline, that problem should be possible to handle.

[quote name='Islander' date='Oct 2 2009, 06:43 PM' post='485591']