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Hi, Peter.
Thanks very much for the response. :)
PJLaird@xxxxxxx wrote:
>
> <<As you can see, the DJIA April-July 1997 run-up (29.15% in 76 trading days,
> or .38%/td) has exceeded that of 1987 (22.86% in 67 td, or 0.34%/td) in both
> rate and extent. It has almost matched 1929 (29.93% in 68 td, or 0.44%/td).>>
>
> Interesting post Jim. Certainly gets one thinking about the bigger picture.
> A respectful comment or two. I wonder if you couldn't have said about the
> same thing on or about 11/26/96. At that time the Dow had run up to about
Yes. In fact, I did a similar study earlier this year on the runup from
July 24, 1996 to Nov 11, 1996. That time, the DJIA was up 22.47% in 88td
(but at a rate of only 0.26%/td), and went on to gain 32.52% by Mar 11,
1997, in 160td (0.20%/td) before declining in March-April. As you can
see, the *rate* was slower then than now and in the earlier runups I
cited. I was fooled, then, too. <g>
> 6600 from the low on 7/16/96 of about 5200. Over that period July to
> November 1996 the Dow rose 27% in 94 trading days 133 calendar days, and at a
> rate of .34%/td (same as 1987). The similarities to 1987 continued with a
> drop and then a retest of the previous high. As we all know we kept on going
> up. The initial setup was "similar" to 1987, but the outcome was entirely
> different.
>
> I notice you use a linear or arithmetic scale as opposed to a log scale. My
> experience has been that a log scale is a far better graphical representation
I understand. However, I did scale the charts proportionately, dividing
the 1929 values by 1997 values, etc.
> of how markets unfold. If you use a chart to look at the market going back to
> 1900 or 1960 on an arithmetic scale, you are basically saying there was no
> inflation (one factor) from that period to today. It means 100 Dow points in
> 1960 carries the same weight, and implies the same ramifications as 100
> points today. I'm not sure that's reasonable. What did the Dow drop in
> 1929? The same numerical drop today would hardly cause the same fuss. The
> arithmetic chart may be interesting to look at, to see from where we've come,
> but I think misleading for analysis. My Dow data only goes back to 1970, but
> on a log scale 100 points in 1970 is equal to 1000 points today. Your 50%
> retracement levels end up being about 38% on a log scale.
>
> One last comment. Although I only have computer data back to 1970, on a
> review of graphs going back to the early 1800s on a log scale, there seems
> one obvious relationship between all the "major" correction. As time passes
> each subsequent major correction is smaller than the previous one. I don't
> see this mentioned ever, but there is a definite trend there. Doesn't mean
> it can't change, but if it did, it would be counter to historical events
> since the correction of the 1830s. The drop in 1929 appears less than 1835.
> Nothing has come close to 1929 since on a log scale. 1974 was definitely
> less than 1929. 1987 was about 25% less than 1974. I don't know if you would
> consider 1990 or 1994 as "major", but they also reduced in size as a percent
> on a log scale.
I think the size of the corrections depends on what degree wave they're
in. I've been "dabbling" in Elliott Wave, and I'm still very much a
novice. This morning, it dawned on me that perhaps 1987 and 1990
corrected 50% of their respective moves from 1982 and 1987 because they
were Wave 2s, with 1987 being of larger degree. I then began to play
with Fib extensions and retracements. (I emphasize that this is still in
the *draft* stage (I got tired)). This analysis suggests that we may be
completing a W3 within a "big" Wave (3) from 1982, with a 25% W4
retracement to ~6800 or a 50% W4 retracement to last July's levels
(~5300). After W4 completes, we would move up to about 10,000 to
complete "big" Wave (3). Again, I emphasize that I am very much a novice
at this; however, I welcome your comments.
> Enjoyed your post. It also made me figure out what MIME files are <G>.
I don't know what they are, either. I use Netscape Mail and simply
attached a gif file to the message. :)
Thanks again.
Jim Harmon
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