It's clear to me that we are in a rally within a secular bear market (some will call it a cyclical bull market). In other words, it's coming within the confines of a long-term or secular bear market. Old timers saw this same situation during the 1966 to 1974 bear market. At that time we saw a series of cyclical bull markets, all coming within the framework of a long-term or secular bear market.
In the end, that secular bear market ended the way most bear markets end -- amid black pessimism and with blue-chip stocks at great values or "below known values."
What was missing at the March 9 lows? Extreme pessimism was absent as were the great values in blue-chip, dividend-paying stocks sporting yields of 6% to 10%.
Saturday, July 25, 2009
Can a 27 year bull market end by 2 year bear market?
Can a 27-year bull market (1980 to 2007) be corrected by a two-year bear market? Most bear markets have tended to last from one-third to one-half as long as the preceding bull market. In other words, the bear market that started in 2007 did not last as long as I would have expected, nor did it produce the great values at the bottom that I would have expected.we take what the market gives us, but we also have free choice. We don't have to swing our bat on every pitch. The market will always be here, and we can chose the pitches we want to swing at.
BOTH the Industrials and Transports are up over 100 points. This is what I call a powerful confirmation, a twin breakout with force. The implications are that the market is heading higher.
BOTH the Industrials and Transports are up over 100 points. This is what I call a powerful confirmation, a twin breakout with force. The implications are that the market is heading higher.
Wednesday, July 8, 2009
We are going to see further selling
Joe Granville states that the bear market ended on October 10, 2008, on a day when 2901 NYSE stocks hit new lows. That ended the bear market, insists Joe, so logically if the bear market actually ended on October 10, then the market has no where to go but up. Well, maybe.
Then there's James B. Stack, who writes and publishes InvestTech Research, which is a very instructive advisory. Jim believes the bear market is over, and he's out to prove it. He displays his Negative Composite Index, which has hit plus 83 (it's been there only a "handful of times in the last 44 years"), and he concludes that "we have very strong confirmation of a new bull market."
Jim then refers to the Coppock Guide which he's followed for years. According to the Coppock Guide, we are now in a "very favorable buying area." James also refers to the advance-decline line, saying that the recent decisive breakout in the advance-decline line ahead of the major indexes is a positive development. "Where breath goes," notes Stack, "the market usually follows. "
Stack adds, "Coming out of the March 9 market bottom, we saw extremely strong momentum in volume and breadth." And this, he concludes, is indicative of a bear market bottom.
Jim then points to the Leading Economic Index, a 12-month rate-of-change. His index has turned up, which, he claims, is a sign that the recession is ending" Well, maybe.
Some comments from one of Investor i follows, who belives we are still in Bear market. The market could just continue to sink with very little in the way of rallying ability, until the March 9 lows are tested and violated. The damn trouble with this market (from the bulls' standpoint) is that it shows no signs of becoming oversold, the Selling Pressure Index just keeps creeping higher, and the Buying Power Index continues to deteriorate. This is one nasty bear market if there ever was one.
Stocks sold off sharply today with all of the major averages falling approximately 2% or more. Over 70% of the stocks on the NYSE and NASDAQ traded on the downside. Leading the averages lower were the industrial and energy stocks. The only industry turning in a positive return was the hospital stocks.
The market averages closed at their lowest levels in two months. The failure of the S&P 500 to move through the 950 area is a near term disappointment for the bullish case. The S&P 500 closed at 881.03 and failure to hold 870 on the downside could lead to further selling.
Then there's James B. Stack, who writes and publishes InvestTech Research, which is a very instructive advisory. Jim believes the bear market is over, and he's out to prove it. He displays his Negative Composite Index, which has hit plus 83 (it's been there only a "handful of times in the last 44 years"), and he concludes that "we have very strong confirmation of a new bull market."
Jim then refers to the Coppock Guide which he's followed for years. According to the Coppock Guide, we are now in a "very favorable buying area." James also refers to the advance-decline line, saying that the recent decisive breakout in the advance-decline line ahead of the major indexes is a positive development. "Where breath goes," notes Stack, "the market usually follows. "
Stack adds, "Coming out of the March 9 market bottom, we saw extremely strong momentum in volume and breadth." And this, he concludes, is indicative of a bear market bottom.
Jim then points to the Leading Economic Index, a 12-month rate-of-change. His index has turned up, which, he claims, is a sign that the recession is ending" Well, maybe.
Some comments from one of Investor i follows, who belives we are still in Bear market. The market could just continue to sink with very little in the way of rallying ability, until the March 9 lows are tested and violated. The damn trouble with this market (from the bulls' standpoint) is that it shows no signs of becoming oversold, the Selling Pressure Index just keeps creeping higher, and the Buying Power Index continues to deteriorate. This is one nasty bear market if there ever was one.
Stocks sold off sharply today with all of the major averages falling approximately 2% or more. Over 70% of the stocks on the NYSE and NASDAQ traded on the downside. Leading the averages lower were the industrial and energy stocks. The only industry turning in a positive return was the hospital stocks.
The market averages closed at their lowest levels in two months. The failure of the S&P 500 to move through the 950 area is a near term disappointment for the bullish case. The S&P 500 closed at 881.03 and failure to hold 870 on the downside could lead to further selling.
Subscribe to:
Posts (Atom)
