Have read several posts. The thread today is in a healthy introspective mood, I’d say… The bottom line, it is a very good thread. Privileged to hang around, and even to make an occasional intellectually stunted contribution (g? ng? Not always sure -ng).
Anyway, our overseas travel companion Herr Onischka wrote a curious long / short term post about the DOW. On the long view, I found fascinating the chart reflecting the decline in the 70’s – early 80’s – adjusted for inflation (!). Why the exclamation? Usually, we think about the markets in the 70’s as being in a range. It is easy to forget that after inflation adjustment, the market was in a horrific crash, losing, as I recall reading, about 75% of its value.
On Onischka’s chart it is also visible that the decline was shaped as a multi-year Ending Diagonal. Interesting.
Another “shocker” is that he sees the top in Jan. 2000 as the top of (only!) 3 of 3 (with 5 of 3 to follow) – originating from the bottom of a big ‘2’ in 1982. The implication is that a breakout he expects will be (only) the 5 of 3. Completely different view of the big cycles. [Personally, I think he is probably way too optimistic here. The count does, however, have the appeal of being totally contrarian to most prevailing views. I am not going to bet on it].
Short term, he ‘prefers’ the (apparent) bear market rally to proceed to about 8500 before it breaks down to the “lower 7.000-er range”. Due to his previously published (last week) cycle work, he doubts that the market bottomed as yet. He thinks it should – by October.
Now, I’m going to go and grab a major grain of salt to go along with all this… Have fun.
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