New Bull Market?
#11
Posted 18 July 2009 - 08:13 PM
#12
Posted 18 July 2009 - 08:18 PM
thanks IYB
Agreed
Don, your posts are always appreciated - and often a breath of fresh air
-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
#14
Posted 18 July 2009 - 09:15 PM
Edited by da_cheif, 18 July 2009 - 09:16 PM.
#15
Posted 18 July 2009 - 10:28 PM
#16
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.
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
Posted 18 July 2009 - 11:50 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.
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
Posted 19 July 2009 - 12:18 AM
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: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.
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.
#19
Posted 19 July 2009 - 01:13 AM
#20
Posted 19 July 2009 - 01:20 AM
Spielchekr,03/1930: price crossed the 13 month ema 45.5% above the low
That was four months after a low.
Do you have a chart showing that? Would love to see how price behaved right after. Thanks.