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Strategies & Market Trends : Peabody Coal vanguard retirement forum

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From: MACD X	1/19/2008 12:39:44 PM
	of 75

01 19 08 No change remain in the bond fund. stockcharts.com A bear market has just gotten underway and price are starting to pick up steam as I suggested might be the case in the last post or so. The chart above is not of the present time frame but is a chart from the last bull market 1995 to 2003. What you are seeing on the chart is a completed bull market move and an entire bear market move. By looking at the chart you could have told when the bear market started by looking at the signals that we follow on this site. First the moving averages crossed with the red 34 moving average moving over the 13 moving average. This is a bearish crossing signal and told all that were watching that a change may have been occurring. Then when the long term trend channel was broken to the down side this was confirmation that a bear move in the market had started. The bear market that is on the chart above erased 50% of the value of the S&P and 80% of the value of the nazdaq, You have probably heard storys of great losses during this time as it was the second largest bear market of all times in America. Japan is in a bear market that has lasted over 18 years and has never made new highs, so it can happen. This is not to scare anyone because average bear markets erase about 30% when they occurr. I dont feel that investor are bullish enough to have a long lasting bear market this time. I am expecting 20 to 30% correction. Thus far the markets have fell about 15% from there highs. Bonds generally are a safe heaven in a bear market, you wont get rich but you may make a few bucks while the rest of the world looses money. Currently we have made about 2% sense we switched to bonds on 11 10 07, while the markets have feel about 15%. I would like to exit the bond fund in the same manner as in which we entered by watching the signals. I was lucky enought to call an early exit of the stock fund as we would just now be exiting stocks if we have followed the signals to the Tee. So now that we know what the past looked like lets take a look at the present chart which is below. stockcharts.com 0 As you can see we have just gotten confirmation that a bear market has started. I will be very cautious entering into stocks as we go along because I realize the risk. understand that there will be sharp rallys where price will shoot up but with out signals to enter I will remain cautious. We will likely miss the first 10% of the next bull market when it starts due to this cautious stance but look at it like insurance.

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