 Gold Customer
Joined: 1/25/2005
Posts: 4
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For a historical perspective, since it is popular to compare today to the 1930's, I went back to look at
the market then. To do this, I put the timeframe as yearly, with the ticker DJ-30. Then scroll back to
July 1932 to Sept 1932, an advance of 93% without a significant correction. Then, March 1933 to
July 1933, an 110% advance without a correction to the 50day moving average. Also, look at 1975.
This crazy market can melt up, after significant declines. We have not reached the 200 day moving average yet. That can happen without a retracement to the 50 day moving average. It has happened before but rarely. As long as the "smart" folks stay on the sidelines, there is plenty of cash to come into the market to fuel the continued rise. However, I am not betting the farm, either way.
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Registered User
Joined: 3/6/2009
Posts: 78
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The problem with your analysis is you are not being realistic about the real world of trading. There is a reason for the saying "trying to catch a falling knife". There is always a human lag to pivots. The short retracements that you speak of more than likely goes like this.
By the time you realized there was a retracement from July 1932. you would have bought on Oct 1932 and then when you realized you had made a mistake; on Dec 1932 you sold for a significant loss of 68%
"The trend is your friend" is much more forgiving.
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Gold Customer
Joined: 1/25/2005
Posts: 4
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Indeed, the Trend is your Friend, until it ends. In my analysis the trend is up, perhaps I look at a shorter
term than you. My "trend" shows price above 10day moving average, both above the 20 moving average
and all three above the 50 day moving average. My definition of a Bear Market is the 50 day moving
average of SP-500 below the 200 moving average. That is the next hurdle. So, for me, this intermediate
trend is up, and tradable. I would become a bigger bull on the retest of the 50 moving average, but my point to all of this, is the market can move lots higher without that retest. Cheers!
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Registered User
Joined: 3/6/2009
Posts: 78
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Then you are not using the yearly timeframe as you stated above. Even using a monthly, price does not get above the 50 ma until May 1935
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Registered User
Joined: 4/21/2009
Posts: 24
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I like to remember everyone that the market is lingering at about that 20% retracement that marks the transition from one primary to a different one - simply said from bear to bull.
I really don't think that this transition is going to happen.
At least not without a lower high, which is not there yet.
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