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Discussion Starter #1 (Edited)
DJI price pattern log scale

. The decline from Feb to the March low broke below the trendline containing the rally from the 09 low. The market came back to kiss the trendline good bye which often happens before the market peels away from a trendline. The DJI broke above the trendline formed a H&S pattern with in a 4 day island reversal & has since broken back below trendline

I do not think I have seen a single posts regarding the above price action. All the focus has been on Covid scamdemic & the Fed. The Fed could not stop the last 18 recessions. Man can not control the temp of the earth to .5 C & man can not flatten the curve
 

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We are above the 200 day moving average, which should be a bit of good news technically. We are also on the cusp of the 50 SMA crossing over the 200 SMA, which is considered technically positive.
 

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We are above the 200 day moving average, which should be a bit of good news technically. We are also on the cusp of the 50 SMA crossing over the 200 SMA, which is considered technically positive.
I agree. I think the S&P 500 chart looks bullish. Being above the 200 day moving average is a really good sign.

Everyone is waiting for more economic results and fallout to come. In the absence of that stuff (which we might not learn for a few more months) I could see technicals driving the movement.

I suppose the risk for the bulls would be getting carried away with good technicals, and then getting knocked back to reality if economic results turn out to be awful. But this isn't too different than the usual story in the stock market.

Plus, if economic results are really bad, the Federal Reserve could pump a few trillion $ more into markets and soften the blow.
 

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Discussion Starter #4
Reversal patterns of a large uptrend are most likely going to happen above the 200 & 50 day moving average.
 

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Discussion Starter #5
Being above the 200 & 50 day moving average actually make the topping patterns more valid since there needs to be a rally to reverse.
 

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I guess the bullishness in the past few weeks is more than a dead cat bounce or technical move. While Covid-19 could get worst, the economy is not likely to get shut down again (particularly under president Trump), which bodes well for the market. A 30% plus drop, while possible, is less likely going forward, but earnings realities could cap the upside for a couple of years.
 

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I guess the bullishness in the past few weeks is more than a dead cat bounce or technical move. While Covid-19 could get worst, the economy is not likely to get shut down again (particularly under president Trump), which bodes well for the market. A 30% plus drop, while possible, is less likely going forward, but earnings realities could cap the upside for a couple of years.
I believe the US administration will put earnings and an 'open economy' ahead of lives. It's sad to say, but the 100,000 to 200,000 Americans who will die in the coming year (about 60X the deaths from 9/11) are probably less important to Trump & team than positive economic numbers and a strong stock market.

I believe this is a bullish story for stocks. It's a "bearish" story for American lives and well-being. Even if better treatments emerge, poorer Americans won't have access and will continue to die -- and probably won't be comforted by a higher stock market.
 

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Discussion Starter #9
If this decline from the high gets rolling to the downside it will be from a text book set up. Based on Dow theory we are in a bear market. @ the March low both the Dow transports & DJI made new intermediate (22 week) cycle lows. To turn the trend up both the Transports & DJI have to make new intermediate cycle highs above the previous intermediate cycle highs. Sentiment is overly bullish huge small trader call buying, low put call ratio, The markets can do anything & the market could keep going higher. I see warning signs everywhere I look with cycles heading lower into 2022

Regarding the death toll it is political & effected by people with an agenda the numbers are fudged.

The improper use of ventilators killing off people & governors like Como seeding the nursing homes with Covid plus hospital are being paid extra for Covid & the use of ventilators, The way death certificates are being filled out by WHO guidelines results in deaths not being Covid. The tests funded by Bill Gates even had fruit testing positive for covid. Government & pharma is more dangerous then any virus. Governments have killed way more people then any virus.
 

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About the "COVID vs economy" situation... I think mankind has to adapt.

When we first heard about the COVID, I personally think it was the right decision to get to close the economy and ask everybody to stay at home. We didn't know what we were facing, but we saw that it was growing fast, way too fast to handle it. Still, the "best decision" depended on the government and the culture of its population. In South Korea, they didn't take extreme measures of lock-down, they took extreme measures of testing and people in South Korea are obedient and are also used to a high level of sanitary measures. Meanwhile, in China, well they even welded the doors shut of apartment buildings and they went knocking at houses to test everybody for fever and if you had a small fever you'd be dragged out of your house right away to go on quarantine. There are countries where people are being tracked no matter what, while other countries where tracking people would lead to a manifestation about privacy.

That being said, I think that each country had to take their own extreme measures to limit the exponential propagation while we try to figure out what to do with that situation. That's because we needed time to adapt and put other measures in place. If there would have been no lockdown and if the economy would have been kept open, there would have been millions more infected. Fearful, sick and dead people doesn't help an economy. That's why it was the good thing to do at first. We needed short-term solutions, quick solutions.

Now, 3-6 months later, we have to adapt, we have to look for long-term solutions. I mean, even if we kept the whole world on lock-down during 6 months, the virus won't magically disappear. We don't have a vaccine yet and it usually takes years to develop a vaccine. Even if the whole world is working together to find a vaccine, it'll take at least a year. I know that some potential vaccines seems to be "almost ready", but rushing out a vaccine is not a good idea neither. Before deploying a vaccine, we must make sure it is absolutely safe. The last thing we'd want with the COVID situation is deploying a vaccine and finding out dangerous side effects within a few months or years... Therefore, even if we find a vaccine, some people will not take it and it's their right (depending on which country you live).

All that being said, it is totally plausible that we will have to deal with the COVID through year 2021 also. Opening and closing the economy each time we fear a new spike in COVID cases is not the solution. We have to adapt. More working from home for people who can, keep social distancing, more sanitary measures for people who can't work from home, more sanitary measures in all public places, voluntary tracking of infected cases, more social awareness. The economy may slow down, but it's better than no economy at all.

This is nature at its best. This is how nature has always been. Survivors are those who manage to adapt themselves. Here, survivors are not individuals, survivors are part of a herd mentality. Even if you take the best measures to adapt, if you are part of a social group who doesn't care to adapt, you will struggle.
 

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I believe the US administration will put earnings and an 'open economy' ahead of lives. It's sad to say, but the 100,000 to 200,000 Americans who will die in the coming year (about 60X the deaths from 9/11) are probably less important to Trump & team than positive economic numbers and a strong stock market.
I don't know what you mean by this. Are you saying that President Trump could save 100,000 to 200,000 lives by ruining the economy? I thought that is what they were doing with the lock outs and social distancing, saving lives at the expense of ruining the economy?
 

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I believe the US administration will put earnings and an 'open economy' ahead of lives. It's sad to say, but the 100,000 to 200,000 Americans who will die in the coming year (about 60X the deaths from 9/11) are probably less important to Trump & team than positive economic numbers and a strong stock market.

I believe this is a bullish story for stocks. It's a "bearish" story for American lives and well-being. Even if better treatments emerge, poorer Americans won't have access and will continue to die -- and probably won't be comforted by a higher stock market.
At the end, the system is set up so that the stock market will end up fine and the economy will survive, but the brunt of it will be taken by mom-and-pop businesses and low-income workers.
 

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Prolonged lock-down will ruin the economy and people cannot afford not working, people will end up with more debt, depression, family issues, mental health issues, suicide.
No lock-down keeps the economy, but accelerates the spread of the virus, which will lead to more sick people who cannot go to work and to more deaths.

There are no easy answer to this. We need to adapt and find the right balance.The balance is somewhere in-between doing nothing as if there were no virus and locking down everybody while closing the economy. That means the economy must be kept open, slowly but surely and our behaviours must change to minimise the spread of the virus.
 

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Discussion Starter #14
Dow Theory track record source Edwards & Magee Technical analysis of stock trends 7 th edition page 55 to 56

100 invested in 1897 would have grown to 11,236.65 by 1956 by buying the industrial average each time each time dow theory announced a bull market & holding until dow theory pronounced a bear market.

There would have been 15 purchases & 15 sells over the 60 year period.

100 invested @ the all time low 29.64 on August 10th 1896 would have only become $1757.93 @ the all time high, (@ the time) 521.05 sixty years latter on April 6 1956

You guys are going to have to do your own research if you want newer data though the theory still is out performing.

The Decennial pattern that out performed the market by 44 fold ( source Millar) over something like 100 year time period has the investor out of the market till mid 2022.

Based on statistics it is best not to be in the market all the time only when the odds are in your favor. Plus its hard to ride out the ups & downs for the speculator which ends up failing to stay invested for ever.

The 200 day & 50 day moving averages have a good track record for making money in the stock market. Though not all methods are equal there can only be one best of anything. Dow theory & the Decennial pattern probably have a better track record for beating the market then the 200 day moving average so I would take more heed to those signals then the 200 day moving average. The more you can have the odds in your favor when playing the better.

Though only use a method that fits your personality that you can follow.
 

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Discussion Starter #15
Prolonged lock-down will ruin the economy and people cannot afford not working, people will end up with more debt, depression, family issues, mental health issues, suicide.
No lock-down keeps the economy, but accelerates the spread of the virus, which will lead to more sick people who cannot go to work and to more deaths.

There are no easy answer to this. We need to adapt and find the right balance.The balance is somewhere in-between doing nothing as if there were no virus and locking down everybody while closing the economy. That means the economy must be kept open, slowly but surely and our behaviours must change to minimise the spread of the virus.
The government is not effecient @ anything. If a virus is dangerous people will not have to be told to take precautions. Was listening to Bob Hoye market historian a while back & he said (not exact words) when a plague was happening in London years back it was written the street were deserted & lock downs had nothing to do with it.

The government always makes matters worse. There is no real pandemic. When people are fat & happy they are peaceful. When they lose everything they lose it. The governments shutting down everything actually will cause more wars & civil unrest which will kill even more people. Though the economy breaths & the economy would have headed down without the lockdowns the government just made it worse.
 

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Dow Theory track record source Edwards & Magee Technical analysis of stock trends 7 th edition page 55 to 56

100 invested in 1897 would have grown to 11,236.65 by 1956 by buying the industrial average each time each time dow theory announced a bull market & holding until dow theory pronounced a bear market.

There would have been 15 purchases & 15 sells over the 60 year period.

100 invested @ the all time low 29.64 on August 10th 1896 would have only become $1757.93 @ the all time high, (@ the time) 521.05 sixty years latter on April 6 1956

You guys are going to have to do your own research if you want newer data though the theory still is out performing.

The Decennial pattern that out performed the market by 44 fold ( source Millar) over something like 100 year time period has the investor out of the market till mid 2022.

Based on statistics it is best not to be in the market all the time only when the odds are in your favor. Plus its hard to ride out the ups & downs for the speculator which ends up failing to stay invested for ever.

The 200 day & 50 day moving averages have a good track record for making money in the stock market. Though not all methods are equal there can only be one best of anything. Dow theory & the Decennial pattern probably have a better track record for beating the market then the 200 day moving average so I would take more heed to those signals then the 200 day moving average. The more you can have the odds in your favor when playing the better.

Though only use a method that fits your personality that you can follow.
But how much weight do you put on the DOW theory in the new economy, which is more dominated by technology and the service sector? Would the DOW theory work in the future?
 

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Was listening to Bob Hoye market historian a while back & he said (not exact words) when a plague was happening in London years back it was written the street were deserted & lock downs had nothing to do with it.
But the vectors for the plague were rodents, many of which live inside houses. Maybe staying outside would have been more beneficial under those conditions, assuming one escapes the ones in the bushes or the sewer.
 

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Discussion Starter #18
But how much weight do you put on the DOW theory in the new economy, which is more dominated by technology and the service sector? Would the DOW theory work in the future?
I remember back in the early 80s people were saying the theory was not valid anymore yet it kept on ticking. Most people do not use it properly. Richard Russel is now dead. Tim cyclesman Wood is probably one of the few guys that understands how to use Dow theory properly & covers it in his market research letter.
 

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I think the Fed is influencing the markets by keeping interest rates low. It kills the fixed income market and makes equities the only way to stay ahead of inflation.
 

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100 invested in 1897 would have grown to 11,236.65 by 1956 by buying the industrial average each time each time dow theory announced a bull market & holding until dow theory pronounced a bear market.

There would have been 15 purchases & 15 sells over the 60 year period.

100 invested @ the all time low 29.64 on August 10th 1896 would have only become $1757.93 @ the all time high, (@ the time) 521.05 sixty years latter
And theory is an idea not fact
 
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