My Market Indicators are now signalling the end of this up move. If you are planning to go short, we are at that point, NOW.
There are certain major indicators I follow that are telling me that this bear market rally is over; IMO we are heading lower. Could we continue to rally some from here? Yes, but I wouldn't count on it.
On 11/8, Thursday, the Dow, Nasdaq, NYSE, and S&P 500 ALL touched the 50% retracement point from the recent high to low (5/22 to 9/21).
The McClellan Oscillator, as of yesterday, diverged big time in both the NYSE and Nasdaq; both oscillators are showing descending tops as the market moved up. A clear signal that should not be ignored; it is so accurate.
Also the Dow 30 has developed a diverging triangle top that was confirmed yesterday; a rare but clear cut signal.
There were other signals, such as resistance lines and trend lines that confirmed my analysis.
Also, I follow William O'Neil's idea concerning volume and accummulation/distribution and found that there were many more days of distribution than accummulation in the last 2-3 weeks. (If down days, on average, have higher volume than up days, it is a sign of distribution or topping.
Joe
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My indicators tell me this particular rally goes to around the 23rd of Nov. then sharp drop. We will meander alittle next week. then good climb week of 23rd. Right now the 3 day chart just reversed to uptrend this past week. Three day chart and time cycles show however that the bear market is not over yet. We will go below 9/21 lows around 1/23/02 then we will have another sustained rally.
APPROXIMATE CALENDAR
Rally continues to week of 11/23
Sharp drop for around one week to 11/30
Rally to 12/8
Longer sustained drop until 1/23
Quick rally to 1/30
Final bottom below 9/21 bottom until 2/5
Then begin a new sustained rally
This is just a general outline but should follow pattern fairly closely. If you follow individual stocks then this stuff really matters very little.
Unless you can find a stock that foolows the same pattern as the DJIA which is what these predictions are based on then it is absolutely worthless. By the way don't bother asking because I'm not telling you. I'm probably full of crap anyway but time will tell. OFFICIOUS OUT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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"This is just a general outline but should follow pattern fairly closely. If you follow individual stocks then this stuff really matters very little.
Unless you can find a stock that foolows the same pattern as the DJIA which is what these predictions are based on then it is absolutely worthless."
Totally agree, Officious. Many seem to ignore perfectly good opportunities because one or more groups of stocks (indicies, aka "the market") are having hard times.
I have made $$ on the long side in individual stocks when the major indicies were going up, down, sideways.
Best.
Bill
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That would be you Tony. Your other method will always do well because there will always be volatility. My ever-refining methods require some volatility as well. Also am an individual stock watcher, with faster in/out times these days. These forcasts shouldn't affect me, but it is nice to be informed. Thanks for the warnings, guys. ---------alan
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I haven't been visiting lately but I can see that we're getting involved in a lot of analysis way outside Ted's area. I don't mind but is there something Ted would say about times like this?
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Your right, Ted wouldn't get too involved with all the technical analysis cropping up at this site (and the other TW sites). But technical analysis does help if we are interested in knowing what phase of the cycle we are in.
What Ted did say, though, is very simple: check page 29 of his book.
"Remember these terms:
base -----accumulation
rise -----markup
top -----distribution
drop -----markdown"
If you look at your long term major index charts, you will see that we have just gone through a long period of years in a top, or distrubution phase, with very heavy volume.
Most stocks are,IMO, definitely in the markdown phase as typified by the index averages. It will take awhile, maybe years to complete this part of the cycle. It will then take years of basing before we are ready to move up again.
Meanwhile, there are stocks that are moving in spite of the bear market, stocks like Boston Beer (SAM), Pacer Technology (PTCH), and Almost Family (AFAM), among others.They have just broken out of their bases and starting the markup phase. There are always good opportunities for buying, even in a secular bear market.
JMO,
Joe
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Nice job Bill. I may have a couple that want to break out but too early to report yet.
Time will tell. This is interesting watching the price action as it happens on the breakouts, the internal reaction is to want to take a quick profit ...
Dave
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Ted Warren was technical analysis in its simplist form.Looking for chart patterns(bases,triangles uptrends,downtrends, degree and percentage of rise). None of these things are based on fundamentals. Now there are some that get involved with all kinds of indicators and other tools to attempt to gain that extra edge but it all boils down to simple trend analysis as your starting point. Ted was a contrarian always looking for a depressed stock. Two perfect Ted stocks are MAIN & AIRM. Both have extended bases with depressed price ranges and will more than likely pay off for those with patience. My personal opinion is there aren't many on these boards that possess the patience that Ted did. I bought AIRM two years ago at 1.75 and sold @ 3.25 within the year. I bought MAIN recently @ 5.39 after it broke into a higher consolidation level. It may still be awhile but I'm holding. I'm looking to buy AIRM again as it is trying to break through its base. I also think Ted would have bought into a stock like PETM which I did @ 5.00 and still own. Anyway these stocks require more patience. I bought BPRX @ 5.00 because I thought it had an 8 year base and look what happened with that. Too bad they all don't fly that fast. Well I also spent some money on HTH and they just went belly up. This was a Ted chart formation also that did not work out. Seeing that was the only one that flopped on me I'll take the loss with minimal damage to the total return for the year. Good thing I only owned 350 shares. All my picks were based on Teds' own form of technical analysis. Ted just probably wouldn't have been bothered with all this MACD,RSI or the like. He was a simple but very smart man. OFFICIOUS OUT!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
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I have to agree with Tony and Alan, bottom line for Ted W. is the psychology of the majority of players, isn't that true. In addition, to trend lines on any individual stock chart.
I wouldn't doubt Joe W. outlook. I believe that there is no way the majority of investors can lick there wounds and get back into the market full force sending us back into the bull market. They will all need time to heal their wounds. In light of that there will still be money to be made on a couple of individual stocks.
Funny thing is Alan, we are still living parallel lives, I too am quicker to sell a stock than I was before. A little more uncertainty in the world has made me more cautious and a profit is still a profit.
I have to agree on SAM, but will wait just a week or so as I still feel the bounce about to happen, just from the psychology of the market. Which is what I believe Joe W. sees on the trend lines.
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