Time to get real long??

The entire quote deserves repeating because I believe it is the most prophetic statement I have read in a long while!

 

"this market is going to grind sideways for years. And I mean years. At least three years and perhaps seven years. We should maintain a trading range from 7900 to 10,600 on the Dow for many a moon. "

Cool. As long as we have a market I am happy.

 

"The entire quote deserves repeating because I believe it is the most prophetic statement I have read in a long while!"

And repeat it again.
I fully agree.
Although a trader should not attempt to predict the future, it is important to realize what is the context around us. Since it helps to explain the psychology and thus effect on volatility and volume (as well as sectors to trade).

We may have seen already the bull trap of this bear market (trap started after 9/11). But somehow I am not convinced yet.
Bullish sentiment is still too much present, believe it or not.
So I do expect a rally of some sort. Why summer ? more likely in fall, as usual. This one could be really the last suckers rally (and possibly last some time).
If you want to know how it might look like, check the nikkei chart after the bubble burst. there is a major bull trap (a correction in the bear market that continued for 15 years afterward).

There are so many reasons for this market to continue sideways or down. The simplest fundamental reason is valuation. historically it is too high (although that means nothing to people). It would take a booming economy just to sustain this market at these prices.
Technically we are regressing toward the long term support trend line and regression line.
wave theory also clearly shows a down trend which could take years to reverse (with a inbetween bull trap).

again, this has impact for traders because volume is disappearing and volatility with it. We need either a bull run (even a trap) or a break below september's low. no V bottom here.. ever.

tntneo

 

<quote>
this market is going to grind sideways for years. And I mean years.
</quote>

It'd be different if you actually provided some valid reasons. But you didn't, so your message is basically useless spam to me... If you don't understand long-term market dynamics, you shouldn't be publicly speculating on them.

1)
After the massive bear market starting late 1929 had bottomed,
MASSIVE gains were made in the ensuing years. A new parabolic trend developed. New highs were not made until the mid 50s, but the trend had been strongly up throught the period. It should not be misconstrued as having been stuck in a trading range just because no new highs were made.

2)
The 72-73 bear occured when the DJIA had already been stuck in a trading range for years. It marked roughly the temporal midpoint of that trading range. Describing the trading range as being a result of that bear is falicitous.

3)
The percentage magnitude of the drop in the DJIA in recent times is very small in comparison to the major declines, and has occured SEVERAL times during an uptrend. It has not been shown to be an effective indicator of an ensuing downtrend or trading range.

4)
All historical comparisons should be placed into their socio-economic environments, and evaluated accordingly. I did not see any such analysis from you.

 

<quote>
The simplest fundamental reason is valuation. historically it is too high (although that means nothing to people). It would take a booming economy just to sustain this market at these prices.
</quote>

Valuation is a 2-D indicator and should not be individually used for market-timing. (I'm saying this 'cause you didn't mention any other reasons except e-wave timing, and you didn't seem to really do a great job of that, IMVHO)

Also, it is silly to say so b/c valuations TREND... So obviously they look out of line with history... And to call a MARKET overvalued you really should understand all the fundamentals involved, make growth projections with risk considerations, and then calculate fair value wrt risk-free investments.

 

didn't someone once say, "can't we all just get real long?"

 

Gee Whiz you must be smart!! I stated a fact of sentiment in markets and the history of markets since the late 1920's and the fact that markets can grind on for years after bubble events!! I was not trying to start a valuation forum, or an alchemy of American meltdowns and the reasons, etc. I suggest a real smart guy like you should pioneer the next bull market and conduct an ongoing forum on macro/micro knowledgeapoolooza. Good luck!!!

 

I'm so sorry!
I dunno how I interpreted "this market is going to grind sideways for years" as a prediction. What was I thinking?

(the 2nd post was to tntneo)

... ... ...

 

Like so many people with too much time on their hands at least you were thinking!!!

 

or perhaps thinking of ways to emotionally rationalize his buy and hold

p.s. tradex21 Warren Buffett agrees w/you and I hear he knows a thing or two about fundamentals