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You've all heard of the cow that jumped over the moon. Now, it seems,
her husband the bull has gone after her to make sure she's not gettin'
into some hanky panky with any little green men.
So the question is, when will he catch her and to his horror find that
his little milk maid is actually a grizzly bear in cow's clothing?
I looked at some numbers that I thought the list might find
interesting...
Price (using the Dow Jones Industrial Average)
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The 1921 - 1929 bull went from a closing low of 63.90 to a closing high
of 381.17. This is an advance of 495%.
If we multiply the 1987 crash low (on a close basis) by 4.95, what do we
get?
1738.74 x 4.95 = 8607
If Little Miss Cow Bear turns out to be the same distance over the moon
as she was in the '20s, then our Big Bad Bull is about to catch her.
It's possible, however, that Ms. Cow Bear has grown more wise and harder
to catch, thereby making Mr. Bull that much more tired by the time he
finally does get her. (And, to my mind, this will make her unveiling
all the more bloodily horrifying to her spouse.)
IOW, what if the stock market has begun to trade like a commodity?
Look at the chart for gold in the late '70s...
In 1976 you had a bottom of 103.5, which rose to a high of 850 in 1980.
That's an increase of 721%.
Do the math on the DJIA:
1738.74 x 7.21 = 12,535
Under this scenario, Mr. Bull has quite a few nooks and crannies to
search before he finds his honey.
Time
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The 1920s bull market, from closing low to closing high, lasted 2932
days. That's almost exactly 8 years (note the Fibonacci number). If
you start with the low in '87, we've already got that beat. To current
date, the bull since '87 has lasted 3563 days. The next Fib number up
from 8 is 13. 13 years is about (quick math here) 4748 days. Check
this out:
2932 (number of days in '20s bull) * 1.618 = 4744
So if the amount of time this bull lasts (in what in effect is a 5th
primary wave) is 1.618 times the bull of the '20s, it will end on
October 14, 2000.
Comments, anybody? :)
Chris
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