Clown-Free Zone... sorry, no clowns allowed Message Board

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Pastimes : Clown-Free Zone... sorry, no clowns allowed

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To: Terry Whitman who wrote (84984)	3/24/2001 7:50:47 AM
From: AllansAlias	Read Replies (2) of 436258

Yes, one would think that a technical bounce is called for after such a decline. It's important imo to see the context though. Using weekly closing values, the 1970 episode came at the end of an incredible run up, not as incredible as our run since 1982, but very nice. It did not spend a couple of years going sideways as the S&P had done before this latest decline. (BTW, the 1970 run of 8 down weeks was followed by another terrible down the next week followed by a strong rebound going into the end of the week.) The decline of 1970 that included the 8 down weeks lasted for 18 tortuous months and shaved 33% off the index by May. The subsequent rally run ran into little resistance until it made back nearly all the loss by April of 1971 -- an increase of 44%. After another short sharp decline, the index went on to a beauty headfake move, the second leg of the bear rally. It made a new ATH in early 1973 and all must have thought the nasty episode was behind them. Not! Then came the last leg of the bear, the horrible decline of 1973/74 which went to a new low while taking back 48% of the index (weekly close to close). Got volatility? -g

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