|
PureBytes Links
Trading Reference Links
|
Attached, is a long term chart of the S&P going back to the beginning of the
two decade long bull market.
Although an uncomfortable proposition for the bears (myself included) this
chart shows the Sept-2001 drop as being right on target in terms of testing
the long term trend support (a double about once every 6.5 years, or about
11%/year). Further, the downtrend line stretching back to the Sept-2000 high
has been broken.
As I type this note, Harry Dent is showing a similar chart using the DJIA,
showing that it tested the lower linear regression channel and bounced. Dent
is still holding to his demographic case that the boomers don't top out
until 2007/2008, and he thinks this is "the buying opportunity of the
century"; he still has a target of 35,000 on the DJIA by 2008 (19% CAGR).
Prechter offers the counterpoint. He showed that: (1) dividend
rates are near all-time lows, consistent with a market top, (2) Investor
sentiment is at near all time highs, (3) wallstreet analysts on average are
recommending a 70% exposure to stocks (also a high). Prechter countered
Dent's demographic case by showing that birth rates mirrored the market (as
measured by the A/D line. Prechter's advice was to stay in cash.
As an aside, when I look at the demographic data, I reach a different
conclusion than Dent,
http://csf.colorado.edu/longwaves/2001/msg02125.html
The way I interpret the data, the stock market more closely tracks the rise
and fall of a younger cohort (25-34) than Dent's aging (25-45) boomer
cohort. From this perspective, the top was made in 2000, and the market is
in for a long steady decline stretching all the way out to 2010. I also
showed separately, that relative to GDP and corporate earnings, the S&P is
still quite highly valued,
http://csf.colorado.edu/longwaves/2001/msg02146.html
and this is inconsistent with a major bottom in the market.
Guess that's what makes a horse race. :)
------------------------ Yahoo! Groups Sponsor ---------------------~-->
FREE COLLEGE MONEY
CLICK HERE to search
600,000 scholarships!
http://us.click.yahoo.com/G_L2TD/4m7CAA/ySSFAA/zMEolB/TM
---------------------------------------------------------------------~->
To unsubscribe from this group, send an email to:
realtraders-unsubscribe@xxxxxxxxxxxxxxx
Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
Attachment:
Description: "sp_monthly_200112.gif"
|