|
PureBytes Links
Trading Reference Links
|
Hi Levent,
I agree that there are innumerable ways to look at the charts including the
Ostrich approach. I for sure don't want to get into one of those
discussions about what is real and what is not(totally irrelevant in the
end to me).I will stick with my observations.
I lived though the Gold Bull Market, that is the only major bull market
that the public became involved in the way that they are involved in this
Stock Bull Market that happened in my life time. I have a monthly Chart of
the Gold Bull Market, unfortunately; I don't have a way to scan it in or I
would. There is an uncanny resemblance between that chart and the chart I
am going to attach of the Monthly Dow.
I believe that the 1982 low was the starting point for this Bull Market
because the chart pattern for the period from 1974 to 1982 looks to me like
a complete formation. Yes, I have heard all of the Robert Miner(and others)
remarks and I admit that my view may be wrong. Yet combined with current
events I will stick with my gut feeling that there is cause for concern.
With the average daily range approaching 100 pt's changes are happening
fast. I believe that this is a process of desensitization. Soon no one
believes there is anything wrong when the market is down 500 pt's. One
other fact is that when analysis designed to show divergences is placed on
the Monthly Dow chart there is a divergence. Make your own observation.
I could not have forecast this market back in the early Bull, fact is I had
no interest in the markets back then. So a Dow of 50000, why not!
Successful trading,
Brent
----------
From: Levent Erbora <erbora@xxxxxxxxxxxxx>
To: 'brente@xxxxxxxxxxxx'; RealTraders Discussion Group
<realtraders@xxxxxxxxxxxxxx>
Subject: RE: Business Cycle
Date: Sunday, May 03, 1998 2:41 AM
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 charts.
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
Attachment Converted: "c:\eudora\attach\DOW8.gif"
|