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Strategies & Market Trends : Classic TA Workplace
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To: AllansAlias who wrote (93570)3/19/2004 11:57:41 AM
From: Perspective  Read Replies (5) of 209892
 
I think a lot of it has to do with your perspective on the secular trend. If you believe that we are in a secular bear market, then the four-year-cycle has probably already topped out. If you think that this is a *real* bull, within the context of a secular bull market like the past couple decades, then there are probably new highs down the road.

I don't see how anyone can expect the latter, though. And *if* I were asked to write a script on how, when, and where a shortened cyclical bull might top within this supposed secular bear, it would look a hell of a lot like this:

1. With the SPX at a 62% retrace of the prior bear (1189)
2. With SOX having recovered at least half its losses (533)
3. With NDX having recovered 38% of its losses (1582)
4. After 12-18 months of up in the 48-month cycle
5. With Internets topping out well in advance of the rest of the market (see AMZN)
6. With SOX leading the way down, and SPX/DJIA showing relative strength
7. With sentiment indicies pegged
8. With J6P buying mutual funds hand over fist again
9. With insiders selling shares as fast as they can dial their brokers

My problem here is finding good short targets. The valuations don't look as extreme as 2000, so it's harder by comparison to find comfortable entries.

I'm back to trying to think in terms of a bull market reflected in the mirror. Where O'neill at IBD is looking for follow-through days to the upside, I'm looking for (and finding) follow-through to the downside.

I think the next deflationary scare is approaching as all the pre-election pump-priming fades away. I'd love to be short, but I'm struggling with finding "safe" entries.

BC
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