K Wave Rider Posted August 6, 2011 Report Share Posted August 6, 2011 Have we started the turn for the final leg down on inflation adjusted Dow towards 40 year cycle low? Still tracking pretty closely with the mid-secular 70's as well... source: http://home.earthlink.net/~intelligentbear/com-dj-infl.htm Link to comment Share on other sites More sharing options...
JonLaw Posted August 6, 2011 Report Share Posted August 6, 2011 The problem with this secular cycle is that 2000 was far worse than 1929, let alone 1966. There's no rule that says that the secular market can't last an extra 5-10 years, which is what we could be looking at here. We are at normal secular market highs. I can't see the final long washout beginning from here. Link to comment Share on other sites More sharing options...
K Wave Rider Posted August 6, 2011 Report Share Posted August 6, 2011 Have we started the turn for the final leg down on inflation adjusted Dow towards 40 year cycle low? Still tracking pretty closely with the mid-secular 70's as well... source: http://home.earthlink.net/~intelligentbear/com-dj-infl.htm And the inflation adjusted from '29 still tracking pretty well too.. So...Two 40 year inflation adjusted cycles tracking pretty closely... Granted it is only a sample size of 2, but since human nature is fairly constant, I like bears odds over the coming years. Although depending on the outcome with the dollar, an inflation adjusted chart may look far different than a nominal one. source: http://advisorperspectives.com/dshort/updates/Real-Mega-Bears.php Link to comment Share on other sites More sharing options...
K Wave Rider Posted August 6, 2011 Report Share Posted August 6, 2011 The problem with this secular cycle is that 2000 was far worse than 1929, let alone 1966. There's no rule that says that the secular market can't last an extra 5-10 years, which is what we could be looking at here. We are at normal secular market highs. I can't see the final long washout beginning from here. Since this may very well be a supercycle 40 year high, as it appears the the debt financed gig may be over, you may be right. It could be deeper and longer lasting then the prior 2. Just as this real estate decline will most likely last far longer and the haircuts be far deeper than previous real estate cycles in the last 100 years. Link to comment Share on other sites More sharing options...
K Wave Rider Posted August 6, 2011 Report Share Posted August 6, 2011 XLF may have lost a very important battle last week as a major support area gave way at the upper blue horizontal. If we breach the 2nd one, it may turn into all out armageddon, as the entire spaghetti factory rolls over in unison again... IF...we come back above that big floor area, that would be a sign something is wrong with bears case, especially if accompanied by MACD crossing up thru zero line... Link to comment Share on other sites More sharing options...
Fibo-Nacy Posted August 6, 2011 Report Share Posted August 6, 2011 On May 2, 2011 index marked a high 1,370.58 then reversed Jun 27 2010, 05:27 PM (traders-talk.com)The middle term wave structure is ambiguous so it is premature to pick a number to gauge whether the rally since March 2009 is complete or not. The following chart embedded with quite a few scenarios. Any way, in between July/August, index will deploy enough trajectory for speculator to determine the status of the primary wave B. Be flexible, Wave count is subjective also evolves with time. http://traders-talk.com/mb2/uploads/monthly_06_2010/post-5846-1277686575.jpg The termination of wave B? requires confirmation. One may use 1102 (0.382 1371-667) as a gauge; Index dipped below 1176 on 08/05 intraday gave an early confirmation signal. Wave count for reference only, it evolves with time. Link to comment Share on other sites More sharing options...
Pretzel Logic Posted August 7, 2011 Report Share Posted August 7, 2011 On May 2, 2011 index marked a high 1,370.58 then reversed The termination of wave B? requires confirmation. One may use 1102 (0.382 1371-667) as a gauge; Index dipped below 1176 on 08/05 intraday gave an early confirmation signal. Wave count for reference only, it evolves with time. While there's as yet no objective confirmation of the end of wave B, the wave structure looks complete for an a-b-c, B-wave rally off the March lows (albeit with a truncated c wave). To me, this is where common sense and additional analysis helps. The end of QE2 seemed like the most obvious sell signal in history, since (in my view) the added liquidity was the only thing propping this market up. So with the B wave structure showing as potentially complete AND the liquidity boom ending AND people becoming aware that there hasn't been any real recovery to speak of (the start of the death of hope), logic suggests to me that we are now beginning the big C-wave down. Additionally, the recent "crash" action suggests we are in (or completing) a nested 3rd, which also fits perfectly with counts which put us in 1 of C. Just my two cents and initial impressions. Obviously, too early to say for sure though. btw, hi Doc, K Wave, Joe, Scully, phat, Jorma, and everyone. Link to comment Share on other sites More sharing options...
howard in nyc Posted August 7, 2011 Report Share Posted August 7, 2011 wow, all the old timers returning. PL, in the past six months, i've started upgrading my home audio gear. (you guys remember when stereo systems were a big deal?) my test lp/cd, that i use to compare speakers and various configuration--that record shares your name. Link to comment Share on other sites More sharing options...
specie Posted August 7, 2011 Report Share Posted August 7, 2011 The S & P move was evident midday friday. Just look at the hi yield etfs and closed end funds Link to comment Share on other sites More sharing options...
cwd Posted August 7, 2011 Report Share Posted August 7, 2011 Short covering, dude. There's no other source of liquidity. I did two shorts on the XLE for a little over three buck. In for a total of about two hours and should have gotten five bucks if I had been a little quicker. Link to comment Share on other sites More sharing options...
An Ant Posted August 7, 2011 Report Share Posted August 7, 2011 Sell the rumor buy the news? Here's potential bullish scenario: We are still in D wave of big picture ABCDE starting in 2000 D wave started either Nov 2008 or Mar 2009 A of D completed at 1220 in Apr 2010. B of D completed in Jun 2010 (a-b-c). In this case we finished (or soon will) wave 4 of C and 5 is yet to come OR B of D completed in Aug 2010 (abcde). In this case we finished (or soon will) wave b of C and c is yet to come I reverse thought this because of following: .618 of 1370 - 1010 = 1147 .618 of 1344 - 1010 = 1137 .618 of 1370 - 1040 = 1166 .618 of 1344 - 1040 = 1156 Link to comment Share on other sites More sharing options...
Fibo-Nacy Posted August 7, 2011 Report Share Posted August 7, 2011 While there's as yet no objective confirmation of the end of wave B, the wave structure looks complete for an a-b-c, B-wave rally off the March lows (albeit with a truncated c wave). To me, this is where common sense and additional analysis helps. The end of QE2 seemed like the most obvious sell signal in history, since (in my view) the added liquidity was the only thing propping this market up. So with the B wave structure showing as potentially complete AND the liquidity boom ending AND people becoming aware that there hasn't been any real recovery to speak of (the start of the death of hope), logic suggests to me that we are now beginning the big C-wave down. Additionally, the recent "crash" action suggests we are in (or completing) a nested 3rd, which also fits perfectly with counts which put us in 1 of C. Just my two cents and initial impressions. Obviously, too early to say for sure though. btw, hi Doc, K Wave, Joe, Scully, phat, Jorma, and everyone. Thank You Before Wave morph into different structure, we keep our perspectives on the table. There are a few FIB clusters in between the possible wave terminal points 1174 and 1105. for example, 1122 (0.5 667-1576), 1112 (0.236 1011-1440), .... etc. where 1105 is very close to the check point 1102 (0.382 1576-667). These numbers are in the scope of the current time window 08/05-08/18. This is a time period the market is susceptible with news event. Events from fundamental side can send index on a downward spiral quickly, sub 1100 is very possible. My wife asked me today about my exit strategy from our short position on BAC, WFC and JPM. I realized I didn't have a clear definition of when to cover. The conservative approach would be to use the "obvious" chart patterns assuming all of the bots and algos are programmed to do the same. Per the graphs below, SPX 1154 is the bottom of the H&S and also the bottom of a medium-term parallel trend channel. This option could be reached on Monday. The next option is to cover when the increasingly steep slope of the waterfall decline is violated. Per the graph below, the rally today did not come close. Unfortunately this approach requires leaving a fair bit on the table because it only gives a buy signal after a significant rally has occurred. It is probably unwise to hope for a retest because they sometimes don't occur on these steep V bottoms. The final option which is the most aggressive, is to assume this particular decline is a major one and to compare it to a recent, previous major one. In the table below, the current decline is compared to the nastiest decline in the 2008 bear market. The "Total Decline" column is the decline from an arbitrarily selected high at the start of the move, to the daily low. The "Daily High-Low" is the percentage swing from the highest point in the day to the lowest point, and thus is a measure of volatility. The "Volume" column is the daily volume of SPX in billions of shares. I have tried to line the two periods up so they are at approximately the same point in total decline, daily volatily and volume. If this comparison holds true, we could have another 5 days of much worse declines ahead of us still. With this last approach, the obvious objection is that we are early in the 2011 bear market, and I am comparing the current decline to one that took place much later in the 2008 bear market. My reply is that today is the first day I have seen anything that even looks remotely like a proper bear market rally (as Doc would say, "shorts are their own worst enema"). The lack of intense shorting activity in the last two weeks means (to me) that we could well still have another nasty 5 days down, before enough shorts build up for a truly spectacular bear market rally, the kind that leaves the bears fur singed and smoking. The level of complacency in the Bernanke Put is so high, that in my opinion we could easily see a recurrence of the nasty decline like in 2008. I have been holding short since last November. Payday has finally come, but this whole decision-making process on when to cover is pretty critical to book the profits before they disappear. I am very open to comments and suggestions from some of you who are more experienced than me. Thank you for sharing your thoughts. i respect each poster's discretionary take; As long as you feel comfortable, thus the best one for you. Take care. Link to comment Share on other sites More sharing options...
DrStool Posted August 7, 2011 Report Share Posted August 7, 2011 TBAC Report Shows Why We Are Doomed Link to comment Share on other sites More sharing options...
Fibo-Nacy Posted August 7, 2011 Report Share Posted August 7, 2011 Sell the rumor buy the news? Here's potential bullish scenario: We are still in D wave of big picture ABCDE starting in 2000 D wave started either Nov 2008 or Mar 2009 A of D completed at 1220 in Apr 2010. B of D completed in Jun 2010 (a-b-c). In this case we finished (or soon will) wave 4 of C and 5 is yet to come OR B of D completed in Aug 2010 (abcde). In this case we finished (or soon will) wave b of C and c is yet to come I reverse thought this because of following: .618 of 1370 - 1010 = 1147 .618 of 1344 - 1010 = 1137 .618 of 1370 - 1040 = 1166 .618 of 1344 - 1040 = 1156 An Ant 1144 is the 0.618 of 1440-667, and 1137 shows in your calculation too. Cheers, Link to comment Share on other sites More sharing options...
Jimbo Posted August 7, 2011 Report Share Posted August 7, 2011 INTERESTING GOLD PATTERN ALERT!!! Sell in May and go away would have been the correct play After a bad break such as this one would expect a bit of a relief rally. I also have also noticed in 2011 that a strong gold up month is invariably followed by a rather directionless sideways to down month And the up months are very trending in an almost straight nice upwards line This is too regular to be a freak. Someone is buying gold at higher prices for a month and then stops buying for a month during which gold wanders around in a rather confused direction!!! July was strong trending gold up month so August will probably be a blah sideways to slightly down month for gold. I think we have a bounce now in stocks - smells right Link to comment Share on other sites More sharing options...
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