Terry,
Excellent calls, but my problem remains that this has been like no major bear market bottom of the last 70 years or more. I do not know of another major bear market of similar degree and length that had a one-day bottom and just kept going, and in the period I checked (1929-present), I found none that either didn't have a full retest or at a minimum a 50% retracement.
My method was very crude: using 10-year monthly Dow charts, I looked for declines of noticeable depth and duration, and based on those, I looked closer at the two that seemed to have no obvious base or retracement in the monthly chart (1942 and 1966), but looking closer at those via daily or weekly charts, they formed much better bases or retracements than the September 2001 bottom.
sharelynx.net
sharelynx.net
I took that on when I was reminded that Edwards & Magee wrote that no bear market has ever ended in a one-day reversal, with the exception of a "mini panic" in 1939.
Hence my contention that even if this is a bottom, we need, at a minimum, a significant retracement (50% plus), and more likely, a retest with a firmer base. The Nasdaq built a much more substantial base at the September bottom.
Also, the internals were like no major bottom of the last 35 years: thestreet.com
Just a few thoughts...
Paul |
