General Market Index (GMI) table

Is the bear market over? Check out my “Guppy” charts

@ 10:59 pm
GMI3/6
GMI-R6/10
T210870%

Everyone wants to know if the bottom of this bear market is finally in place. The truth is that only liars and lucky people can really call a bear market bottom close to its occurrence.     I noticed years ago that the pundits on TV usually felt comfortable calling a new bull market about six months after the actual bottom.

The true trend follower rides the current trend until his/her indicators suggest a new trend has begun.   But all trends are not   equal.   Within a longer term down-trend there are short term up-trends.   Currently, we have had a daily up-trend within a weekly and monthly   down-trend. Day traders who monitor trends by the minute or hourly, for example, can trade numerous up and down trends within the longer term trend.

Thus, each person needs to determine his trading time interval when trying to trade trends.   And one can trade different pots of money using different time trends.   So I will not commit my university pension money to the long side of the market when the weekly trend is down.   I stay in cash during such periods. But I may trade with my IRA funds during a daily up-trend that is occurring withing a weekly down-trend.   However, I have had more success trading consistent with the weekly trend and tend to stay mainly in cash even in my IRA during a weekly down-trend.   It is hard to resist buying some recovering stocks during a rally like we have just had, even though my longer term trends are still down.

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Jon Stewart: media pundits failed us–but I wrote last June that banks and markets looked sick

@ 11:33 pm
GMI0/6
GMI-R2/10
T210822%

It’s is great that Jon Stewart informed the world last week that the media pundits at CNBC   failed to provide accurate information about the impending financial crisis.   But by using technical analysis, I warned my readers last June what the charts were telling me and transferred my pension money   out of mutual funds to money market funds:

“Look at this weekly chart of   Bank of America (red line= 30week average; click on chart to enlarge). Other bank stocks with similar charts include : WB, UBS, STI, and DB.   When major bank stocks are in a free-fall, can the rest of the market be far behind?” (Posted on June 8, 2008)

The media pundits and the financial advisers are self-serving when they try to convince us that we need their wise counsel.   I say that one can rely on the market itself to alert us to danger. I use the TC2007 charting program to analyze the market trend and post my conclusions on this blog.   I know a lot of you have used my blog to protect yourselves….

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No bottom in sight for this bear market–it’s just the beginning?

@ 4:03 pm
GMI0/6
GMI-R0/10
T210813%

I have written a number of times that one can ignore the fundamentals and all of the media pundits and just let the market tell us what it is likely to do.   When you are crossing the street and a truck comes bearing down on you at high speed, you should not argue with the fact that it is there.   You should not wait in the street for the truck to stop and/or exclaim incredulously that it should not be there.   One needs to move quickly and get out of the way or jump on board the truck,   if that is the goal.

I have been in cash for all of the major declines since 1995.   (I also avoided the 1987 debacle.) I have never been caught married to my long positions,   arguing with the market or hoping that a decline will end.   No one can detect a bottom until sometime after it has occurred.   Why do people look to experts to predict the market when none of them predicted the current decline!   Experts are really great at explaining to us after the fact, all of the reasons why the market declined.   When someone can tell me the reasons before the decline occurs, then I will listen.

So, what can the market tell us about how bear markets have ended?   I showed you several posts ago that the current market is tracking somewhere between the 1929-1932 and 1974 bear markets.   How did these huge declines end?   It turns out that they showed amazingly similar characteristics.  

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