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-----Oorspronkelijk bericht-----
Van: URNMOR@xxxxxxx <URNMOR@xxxxxxx>
Aan: metastock@xxxxxxxxxxxxx <metastock@xxxxxxxxxxxxx>
Datum: dinsdag 22 september 1998 2:25
Onderwerp: Re: Elliotscope : Current
>I found this post and the Head and shoulder post not only interesting but
>almost similar in their prediction of the demise of the DJIA. They both talk
>of a low of under 6000 and even lower. Is this going to be a classic
>retracement action of the magnitude referende in the TA books? In numerous
>TA books , (Pring's , Murphy's, Elder's and Schwager's) they discuss
>retracements of 1/3/ and 2/3 's. We are getting close to the 1/3 since the
>Dow has begun its unprecdented rise. If history repeats itself (as it often
>has although not exactly) and the H & S and the Elliot wave analysis proves to
>be accurate than I believe we should expect a bear market that will retrace
>about 50 % of its gain. The question is when. Again being a believer in
>crowd histeria this could happen within the next month. Wouldn't that be a
>surprise as the next month is Oct.
Use of 1/3 and 2/3 speed resistance lines can also be helpfull as much as using the
natural 33-50-66 % retracements, actualy better, the ave 25-50-75 % trend retracements
stocks generaly go through in time.
The predictions above can be made at all time, but ONLY when support and/or former
resistance lines are downbroken, then they can become effective/in effect.
These 25-50-75 corrections of any of the previous rises(ST,MT,LT) are NOT bear markets,
but the natural(=technical) in time returns to average, eg the technical corrections.
Bearmarkets coincide with the very slow(>0.5), none(0) or even better, negative(<0)
growth in the gross domestic product(ivety) growth of the underlying subject.
In this the countries or worlds economies national growth(gdp), expressed in quater to
quater figures, are measured and then explainatory directing to the downside.
Quartily standstills in growth(+0%) ofcourse are considerd to be a bit "depressing" but
negative growth(<0%) is a straight out recession(return to poverty/governments will try
to avoid this/when the world is sick this will be hard to avoid).
Note that these figures are also (re-)calculated on a year to year basis.
Lately the IMF and the World Bank have set their year on year World Growth Figures
estimates back from +3.5 to +2 - 2.5%, this is for the world economic outlook in general.
And that considerd is straight BULLISH.
As most of the Western Industrialised countries are still strong growing(>2 or 2.5%)YOY
upose to prevous fast growing periods(>3 or 3.5%), we therefore cannot speak of
bearmarkets. These are hic-ups, wich frequent occure before and after the peak in the
economic cycle. Future drastic changes ofcourse can change all this. Next up is the LT
bottoming of intrest rates and (or after) its "creaping" rise. Deadly for the majority of
investors, like for companies and stock buyers in particular.
Since we are in this tecnical correction phase, any ST counter trends made can be
considered to be UpTrends in the DownTrend. This DownTrend can be bordered by
paralel lines, thus forming the DownTrend and also implying when it is over when breaching
either the top declining line(market changes from down to sideways) or when breaching
the bottom line(implying a futher NEW wider down trend).
In trends(up or down) patterns do develop with currently in the Dow Industrials chart the
"Up-Flag in a downtrend"(=bearish) pattern, implementing a futher decline can be expected.
Note that this pattern can be outbroken at the top(=possitive) then making it "invalid"(99%).
A down-breach of the former low(=negative) or this patterns rising support line can set of
a bearish market and can be considered as very negative.
This years rises where not confirmed by the Transportation sector(Dow theory) and were
false outbreaks at the top range. This also implies that a continuation of last years
Trading market is now effective with a higher horizontal ceiling(Jul98-High).
With the former horizontal floor (Oct97-Low) still intact, any guess can be right, but is not
(as) yet relivent. Testing of former Major Highs and Lows is, and as such, Sep 7400 Low
is now being tested and when proven to be valid(present) support, is also a higher Low in
a long term chart.
The (next) question is 'therefore' not when, but if.
>My real question is: has anyone else come to the same conclusions in their
>analysis? Are not many stocks trading below their 200 day moving averages,
>PE are outragously high (I know TA purist do not believe in fundamentals but
>we cannot deny that PEs have been at an all time high, the world economy is
>soft and our leadership although not totally paralized is suffering from a
>sunken chest wound.
I consider myself to be a proper and simple TA user and as such ALWAYS consider
fundamentals for a look at the markets.
Trash will not get paid for(have a high price), wrecks and rubbish neither. Be blindfolded
or sticking the head in the sand is for the 'lesser' equiped.
Blind "mechanical" system trading is only a very minor part in the world of TA. Cannot think
of that many to be true TA users as well. Analysing is analysing, not machine written
and to be esthablished by a machine, tho computers can come close to it, are darn handy
as such(Tool) but deepest analytical and therefore proper TA will always require the
inevitable manual labour and input.
Any too high estimated (P/E) earning forcasts will get "automaticaly" periodicaly adjusted,
sometimes 'rediculously' punished with the steep falling of shares price, but then away goes
the "high" part in the factor.
3td quater results and 4th(+estimated next years) forecasts will have the key, as to the P/E
to be fair high or to be too high.
Thus, this is now up to the companies forthcoming results-publishing. A shake-out among
these (eg cyclicals+mologs+not respecting share holders values)is bound to happen
(actualy has already started).
Local 'Holywood' and other media-exaturated "political" traumas are not affecting the
worlds economics that much.
The BIG Lack in Financial leadership(G7+) is however.
As such, political stability does help the markets more, upose to the disruptive above :
the late "economicaly" non-events, setup by the countries publication horny dummies.
>I am not advid trader and I sure do not have the technical background that
>many on this list has but I do read what is printed and right now I am concern
>that the bubble will bust especially if another straw is added to the camel's
>back.
Try receiving more of the global financial news will clear the mind. But in this remember that
any of the vital information is currently 'witheld' indoors, by the companies financial departments.
As mentioned before soon to be published(3td quater results).
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