I'll weigh in with Granville's phase guide. Most signs point to this being the middle to late part of Bear phase 2.
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Bear Phase 2:
A/D line: Turns sharply higher on strong mid-phase rally, but move turns out to be transitory, thereafter breaking down.
NH/NL: New highs temporarlily outnumber new lows, but give way to a bearish pattern of increasing new lows.
Dow 30: One or two Dow stocks actually get back to new highs, but are unable to move up further.
Transports: Transports rally, but fall short of the peak. They fail to confirm the industrials, or vice-versa.
Time: 7 to 14 months have passed since the bull market peak.
DJI 200 day mov avg: Coming down hard, which makes it easy to deceptively penetrate briefly on mid phase rally.
News: News has soured, and market responds with sharp declines. Public continues to buy on all reactions, still confident that bull market can be revived.
GM: GM is unable to tack on more than a few pts in mid phase rally. 200 dma is trending sharply lower.
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A few Bear Phase 3 characteristics, which make me think that we're still in Phase 2:
A/D: Zig-zags to new lows
NH/NL: New highs running close to zero, while new lows are in the several hundred range.
Transports: Falling rapidly, recording new bear market lows.
Time: 14-21 months past bull market top.
News: Public has tuned completely sour on the market, and sell on all bad news. Extremely pessimistic attitude.
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So in a historic sense, I don't think we have seen the bottom. I would suspect that the bear bottom is still 6-9 months out.
Regards,
TW |
