July 5 was a 90% upday on the Russell 3000 Excluding Worldcom, Points up = 95% Volume up = 94% Fantastick numbers, but a shortened day. July2 was a 90% down day, excluding Worldcom also. Hmmmm. Calling Lundy.
It's funny. Only last summer did people even start to admit we were in a bear market/mild recession. And I still hear the two dumbest words on wall street - "profit taking" - nearly every down day when I turn on Bloomberg. Now everyone's convinced that we're pulling out and that this is the start of a new bull market. Fools rush in...I'd rather wait and see what happens.
Here is a thought, my shorts were up way more than my longs in % terms. Most of my longs are above or very near their 200 moving averages. I would interpret this action as short squeeze rather than real buying, although I will admit that I can see some things starting to set up for a nice rally. Comments
Gabriel, we had a 90% down day <i>and</i> a 90% up day already? Some of my babies closed on their highs.
Well Chas, that's how my calculations came out for the Russell 3000. Friday was a shortened day and maybe that dilminishes the result,I don't know. Desmond at Lowry's Reports calculates the NYSE for points up/down, volume up/down. Other people use Volume up/down and advancers up/down for a sweep of days and use MAs for these ratios to validate signals of Bull/Bear moves.
I would comment that if traders are waiting on the "public" to disdain all interest in the stock market as a sign of "the bottom" they may wait a long time. A lot has changed since the last bear market of 73-75. An enormous number of people own stocks through their 401, IRA or some other retirement account. They are not going to "bail out" quite so easily and if they actually did we have major problems with the economy as a whole. Everyone likes to use the 73-75 period as an example of a bear market. However, one must remember that the nation had double digit inflation, huge tax advantages in owning investment real estate, no IRA/401, no easy access to the stock market for the individual investor. We now face the terrorist threat, questionable earnings in the PE equation and the new internet blow off. I think CSCO is still around 100 times earnings at $13, LOL. I don't think Robert Precter has ever been right. He used to come on Money Line and espouse endlessly on the Elliot Wave Theory. Same with Jimmy Rogers, Byron Biggs. Both have been wrong for an entire decade.
Take a look at the SPX monthly chart . Stretch it out for a decade. Do we confirm a botom by going up above 1172 and supporting the "W" theory or sell off into eps announcements down to the next fib retracement, 822 (61.8%) or so? Step right up and place your bets.
This will explain his theory in more detail. There is an important part of this theory that everyone seems to be ignoring. Read the original article. It also provides graphical examples (pages 8 and onwards) through several previous bear market bottoms: http://www.lowrysreports.com/samples/dow.pdf What he lacks to mention is how many false positives have occured. That is, how many times has the "signal" been given without a matching bottom.
He gives a table at the end that shows every time 'the signal' occurs, and every time a confirmation occurs. Is that what you meant? Check it out.