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Hi Wong,
To continue last evening's discourse, I offer this as what I see about the
DJIA. All observations are from Metastock semi-log charts. I apologize if
my thoughts are known to informed RT readers and because the following
observations are not directly responsive to your most recent post.
Long Term Observations
The long term lower trendline since 1900 is defined by the lows of 1932 and
1982. Its current value is in the neighbourhood of 2000. Absent armed
conflict between the PRC and Taiwan which evolves into global conflict, or
some other massive economic dislocation of global proportions, this
trendline is presently of historical interest only.
The long term upper trendline since 1900 is drawn parallel to the lower
trendline passing through only the high of 1929. Its current value is in
the neighbourhood of 19,000. In my humble opinion it is of more relevance
over the next 5 to 6 years as the 20 year trendlines intersect the century
upper (resistance) trendline within that time frame, albeit at a higher
level (somewhere around 31,000 in 2005-2006).
20 Year Observations
The 20 year lower trendline is defined by the lows of August, 1982, and
November, 1994. Its current value is about 7100.
The 20 year upper trendline is (somewhat arbitrarily) anchored by the high
of August, 1978 and the high of August, 1987 so as to parallel the lower
trendline. The upper trendline's current value is about 12,500. The DJIA
at 11,700 was not far away. Four waves since the beginning of 1999 have
come within 10% of this upper (resistance) trendline. I believe this is
significant.
7 Year Observations
The 7 year lower trendline is defined by the lows of December, 1994, and
October, 1998. Its current value is about 9770 as of March 13, 2000. Of
possible significance is the fact that the DJIA touched and rebounded from
this line on March 8, 2000, and March 9, 2000.
I do not project a 7 year upper trendline since it would have intersected
the 20 year upper (resistance) trendline in late 1998 or early 1999. By
definition, I believe that the upper (resistance) trendline of greater
magnitude (the 20 year resistance trendline) governs until it is
demonstrated otherwise.
Moreover, by definition, the DJIA is working its way into the right hand tip
of a (bearish) rising wedge. This would make the 20 year lower trendline of
significance as, if and when the rising wedge is violated on the downside.
Regards,
Tony
-----Original Message-----
From: wong <whs@xxxxxxxxxxxx>
To: realtraders@xxxxxxxxxxxxxxx <realtraders@xxxxxxxxxxxxxxx>
Date: March 10, 2000 7:00 PM
Subject: [RT] GEN - bull or bear?
>Hi All:
>
>There are so many posts on the impending market crash I've lost count of
them.
>
>We've been concentrating on the DOW, S&P (futures) etc.
>
>
>How about looking at the thing from another angle?
>
>
>Please refer to the attached weekly charts of Russell 2000 and Nasdaq
indices.
>
>Where's the bear? I certainly can't see one at the moment.
>
>On the other hand, the oscillator indicators are telling us that both
>indices are at or near overbought levels. As I said in my earlier post,
>this should alert us that in the future, the indices may have some
>retracement. If one is cautious, one should be prepared to liquidate some
>stuff and take profit. As I also said, as long as the "market" is bullish,
>it may not be very wise to go short.
>
>This applies, of course, to both Russell 2000 and Nasdaq.
>
>
>S&P and DOW certainly are in a different category, and should be treated
>differently. That is, if they exhibit signs of bearishness (and I'm not
>sure if they necessarily do), then it may not be wise to go long so soon...
>
>
>Regards,
>
>Wong
>
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