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Hi B in UD,
If that most recent Linear Regression Angle of increase of 83 degrees on the Dow chart looks scary to you, or if you feel like you are running out of degrees, there is an easy fix: Just increase/expand the horizontal (time) scale on your chart; that should give you a more reasonable slope. Another way would be to start your linear regression study from an earlier date, that should also bring your slope down. On the other hand, if you want a clearer picture or a better perspective on the longer term behavior of, and prospects for the Dow, or the stock market in general, I suggest you perform your linear regression studies on a long term logarithmic chart, together with the channels drawn parallel to the regression line and going through the extreme highs/ lows in the study period. The lows in the 1970's would be a good place to start your linear regression data. Another way to get rid of this "fear of heights and large numbers" is to study some long term inflation adjusted char!
ts.
Now, I certainly can not outbid you in your "Dow at 1 million by 2010" prediction, but I think a 30,000 - 50,000 Dow in the next 20 to 50 years is a very realistic possibility. As for the first meaningful or major top, I would venture to say probably in 1999-2000 and above 10,000.
And I wonder, how many people actually said, let alone conceive, that the Dow would trade above 9,000 in the next 60 years or so, back in the 1930's when it was trading below 50 (fifty).
Best regards,
Levent Erbora
-----Original Message-----
From: BrentinUtahsDixie [SMTP:brente@xxxxxxxxxxxx]
Sent: Friday, May 01, 1998 4:42 PM
To: RealTraders Discussion Group
Subject: Re: Business Cycle
Greetings Bruce,
If I understand you right your saying stocks will go up in the near future.
I find compelling evidence to suggest that a market top could be
approaching within the next 1 3/4 years. The most recent Linear Regression
Angle of increase on a monthly chart of the Dow was above 83 degrees. That
means for the market to continue to rise at the same rate it must go nearly
straight up(90 degrees). Will there be more highs, maybe. Are storm clouds
gathering, maybe. Of the stock investors on this list I haven't read that
much bearishness. In fact virtually everyone says that the market will hit
10000 which is a bad sign in and of itself. As I said in a recent post. I'm
predicting a Dow of 1 million by 2010 and I don't think that anyone has
outbid me yet. Now when gold was $800 dollars an ounce in '79 some said it
was going to $2000. Hey, why not!
B in UD
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