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Sometimes a chart helps to put things in perspective. Not really enough
history here to measure the major cycles, however the general view is that
markets cycle between trading ranges (price contained by a major prior top)
and strong impulsive moves every 17+- years. Another basic tenant of
technical analysis suggests that corrections require a combination of price
and time. Note that in the DJIA, the Jun32 market bottom was reached in just
33 months with an 89% decline while the Dec74 bottom required 94 months and
a 42% decline. The S&P 500, being a broader measure, has a slightly
different profile of wider swings during the 70's bear market.
Looking at the DJIA, this bear market has lasted 30 months and declined 29%
... odds favor a much deeper or much longer decline, or some combination of
both. The mid-line, which I consider to be the absolute minimum price
objective currently sits at 8,000+-. The S&P 500 mid-line is 800+-.
Earl
----- Original Message -----
From: "Earl Adamy" <eadamy@xxxxxxxxxx>
To: <realtraders@xxxxxxxxxxxxxxx>
Sent: Friday, June 28, 2002 1:54 PM
Subject: Re: [RT] Investing Now?
> I misunderstood .. sounded like you wanted to find something in which to
> invest. Nothing wrong with trading, however trading is not something you
> miss out on because there is always another trade just around the corner
and
> it doesn't matter whether the trade is long or short. With all due respect
> to the new money Gen-x'ers, most of them were gamblers who were pretty
well
> wiped when the buy the dips bubble burst. Those of us who have been around
> the markets a long time could see the bubble building and knew it would
> burst. Many of us put our investment accounts into cash too early to nail
> the top but early enough to keep our assets. I trade futures full time and
I
> invest. What market history teaches us is that "the bottom" will not
arrive
> with bugles blowing and 15 minutes to buy ... the bottom will hang around
> for a long time and the public will be extremely uninterested in stocks.
>
> Earl
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