Casaubon:
I guess my post was confusing. However, I was thinking of an 11-month horizon for the end of the 17-year bull market and a 2-month horizon for a short-term low with a subsequent rise in the INDU. Once that rise is done, I think it will all come to an end.
I think the 17 year bull market will end by November 2000. One of the reasons was the post below.
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I think the end of the current presidency will have a lot to do with the end of the 17-year bull market. I also think the Fed is making the same mistake as it did in 1980. The way to end something that is out of control is to stomp it not nudge it. If the Fed is making the same mistake, then its errors will become clear as it is forced to take drastic action next year. This will help to end the 17-year bull market.
For the shorter term--two months or so--I am basing my thoughts on my calculations and analysis of elements of the ARMS index. I have found that using NYSE and INDU issues and volume together is an effective way to set positions for a significant move that will last several weeks to several months. The information I use on NYSE issues has shown that they peaked around Thanksgiving. NYSE volume figures peaked shortly after that and have been weakening since.
Poor performance in issues (advancing vs. declining stocks)can be tolerated for some time by a market as long as good volume (advancing vs. declining volume) numbers support the move up. This happened last year and is happening now. As I mentioned on another thread, the 20-day ARMs was below 4 for 11 or 12 days in a row. I have never sen that before. It was accomplished by lousy performance in issues, initially strong performance in volume, and now weak but better volume figures than issues figures. This year the pattern is more pronounced than it was last year. It means that our move this year is narrower than last year's at this time.
Now this is what I need to see for the short term advance. Shortly, there needs to be a decline in the INDU to around 10700. The ARMs should be over 1 for several days. I want lousy volume and issues numbers. This would support an oversold short-term situation sometime within the next two weeks or so. After that, I want to see some inprovement in issues numbers--better breadth--but I do not expect it to be very good. That is based, to some extent, on the lesson being learned this quarter about buying "value" stocks. Once some improvement is made in the issues, I want to see very strong NYSE volume numbers--maybe 8 advancing to 2 declining on a daily basis for several days. That volume should be moving into a narrow number of issues that will move the indices. If this happens, I think a rally can last into the first quarter with a top at about 12500 to 13000 INDU. That top will be dictated by the amount of funds moving from the garbage-nets into the cyclicals.
Once this top is in, I believe we will begin the final topping-out phase of this 17-year bull market. Maybe we will see the high in the first quarter, a decline during the second, a rally into the third, and the nasty leg down in November 2000.
This is all dependent on many things happening together in the proper sequence. Life rarely works that way. So I can only wait and see and continue to document and analyze my data. However, if the above comes to pass, I should be making money.
I apologize for the length of this but I tried to be more clear. |
