Believe me, I've spent a lifetime studying such things. And the conclusion I reached years ago is that Context is Everything. Look, if we were above a rising 200 day/55 week/13 month moving average, we wouldn't even be having this discussion. In May of 2003, I was shouting the points made by many in this string from the rood tops. You all KNOW that. Because the context was that of a primary bull market. Because we'd had a long term base, a break through the 13 month MA and that MA had turned upward. Because the market having done the necessary work to support a primary bull trend had broken through and confirmed the new primary direction.http://stockcharts.com/c-sc/sc?s=$SPX&p=M&st=1980-01-28&i=p39183268817&a=149688849&r=179.pngFWIW, I don't like to see big spikes in the % of Bulls in either AAII or II. That said, it's only a short-term Signal.
We're a long way away from a good sentiment set up for a major top.
Context is everything.
Don,
Go back and take a look at market historical periods with a secular bear trend. Pick a secular bear period (1966-82 for example). What was the average length of a bear run? Keep in mind the recent bear run went from Oct 07 to Mar 09 or 18 or so months. Compare this bear run to historical averages in time and price. You will find it is about avg in time and more than avg in price.
I maintain that those who say that we are in a new primary bull market now are arguing with the evidence and the facts. They are guessing, hoping, or maybe just scared or being left behind. The evidence as shown by this chart among other data, clearly says: Primary Bear Market. When that changes, as Ross Perot used to say "I'm all ears" to your arguments.
The whole argument we are are having in this string is not about short term or Intermediate Term signals. It is about CONTEXT. Run those same arguments by me when we are above a rising 13 month (or 200 day) MA, and then you won't get any of this argument from me.
Good trading, D
Don,
By your own metrics (200dema, 55wema, 13mema) the NDX/qqqq IS in a new bull market....right now. The NDX100 is above each of your moving avgs AND they are upward sloped! So are you calling a bull for the QQQQs? I have read recently you shorting them. The SPX was LOADED with financials which has crippled it so it's lagging IMO. The R2K is close to signaling a bull market by your measures.
In context, the price damage done by this bear run over such as short time period (Oct 08 to Mar 09) is distorting the MAs. There are plenty of other KISS indications I mentioned that argue heavily for at least the strong possibility of a new bull. The problem with using a single minded technique is they simply will not work all the time. Your method has worked in the majority of historical contexts. I even use the 50wkema and slope myself. The problem has been that this bear is ahistirical...similar to the 1973-74 bear. Again, the 55wk, 200d and 13m MA would have caused you to miss the majority of the bull run that sprang out of that one.
I'm not trying to fire up a debate with you...just trying to spur "out of your box" thinking.
The Qs are NOT in a bull market, looking at the EMA is not enough. The historgram of a simple MACD is proof positive that the Naz/Qs are still short of a bull market.
But if you were to pretend that it is, I somewhat recall another time when the Qs were waaaaaay ahead of the general market. Way ahead.
I think it was about 9 years ago and what followed, was not pretty.