The 4 bears: Nikkei, Nasdaq, DOW 1928 and the current S&P

Discussion in 'Trading' started by Port1385, Feb 14, 2009.

  1. [​IMG]
  2. As I mentioned before in other posts, I do see the DOW hitting 6000. Buying when it hits this level.
  3. empee


    whats interesting about this chart is if the "start date" is correct we are nowhere near time wise where these bottomed 2+ years. If we were past the bottoming point of the previous bears, might give some hope. but alas, not to be.
  4. There is one thing I would consider for timing. Things are changing MUCH faster these days... so in terms of time the same process which took 2-3 years in 20-30ies can easily take 1 year now, considering internet and other stuff which allows public to react much faster.
    Just my 5c
  5. Think about that theory for a moment and look at the chart. Price of the S&P is somewhat higher then the DOW 20s and the Nasdaq 00s, but lower then the Nikkei of the early 90s.

    All of the charts look similiar. All of the charts appear to have a similiar pace.

    Here are the stages I see:

    Stage 1- Price falls quickly in a "waterfall selloff" on high volume.

    Stage 2- Price keeps falling, but at a somewhat slower pace then the initial selloff.

    Stage 3- A bottom is reached

    Stage 4- Price meanders in an unpredictable range and there is no telling when or if there will ever be a breakout.

    My observation is that we are halfway through the selloff and a bottom is probably a year or so away. However, even when the market bottoms that doesnt mean that unemployment and other such economic indicators will bottom as well. The market also will take 2 to 3 times longer to recover then it took to sell-off. We are talking at least 6 years, but probably more like 10 years for a recovery.

    The Nikkei never recovered and continued to hit lower lows over a 20 year period despite much government intervention and a zero percent rate.

  6. One contradiction in there: The Nas2000 is in a particular stage on that chart still today. Unless the Nas and S&P completely diverge from one another this year, then either the Nas will not go sideways or slightly higher over the next couple yrs (as projected on that chart), or the S&P will.

    It's possible they will diverge, but it doesn't seem likely considering the growing cap overlap (S&P tech weighting is growing fast: XLK up +0.19% over past three months while 4 S&P sectors are down over -10% in same period).

    Personally, I am still holding SPY short. It's just an observation.