<<The trend is down. Can I get anyone who reads this thread to agree with that simple fact?>>
RtS, I agree with that fact. I think most on this thread would agree with that fact, and I think you and I are really not all that far apart.
Let me try to "define" how I look at market and my definition of where we are in the "cycle". In order to do that, I have to make my own definition of cycles or market trends, which not all people might agree with. I define trends as primary, intermediate and minor.
Right now, I would say the primary trend is "up", the intermediate trend is "down" and the minor trend is "down. I base this on the fact that a major low was set by the NASDAQ in Oct 02 at about 1115. We then ascended to a high of about 2155 in January of this year. Since then, the NASDAQ has been in a downtrend for 7 months, and of course, the last 5 weeks have been down - big time!
I spent a little time going back over the NASDAQ prices since the middle of 1996. I "eyeballed", and noted, what I considered highs and lows over that period, up until last Friday's close. I put this data in a table that is a little different than usual - the results are shown below. To get started in the table, begin with the date, 6/96. on this date the NAS was about 1250(incidentally, this table uses some "rounding" and "approximations" - don't mind the exact details please). Going to the right, 1 month later, a low of about 1030 occurred, a loss of 18 percent. Now going to the left again, the next high was in Jan 97, 5 months later with a value of 1390, a 35 percent gain. In this fashion, going from right to left and then back from left to right, a tabular "picture" of the NASDAQ "cycles" can be viewed.
Please note the following from the table.
1. The low that occurred in Oct 02, 1115, is the lowest value since the low of 1090 set in Jul 96(actually they are only 25 points apart). Since we are presently around 1775, I say we are still in a primary uptrend.
2. Note the number of months in the "downtrend" column. We are presently in month number 7 of an intermediate correction. Only 2 other periods are longer of 9 months each.
3. In those 7 months, we are presently down 18 percent. Note that 5 entries in this column are of the similar magnitude - the 1st 3 entries in the column and the last 2. The other 5 entries in the column are considerably higher.
What does this have to do with the future? I don't have any big predictions, but I do think we are going to have a rally here in the near future. The 18 percent loss in the NASDAQ from January puts us in the right ballpark compared to past periods, and the 7 month down period is reaching the limits of the prior longest down periods.
NASDAQ PEAKS AND VALLEYS
PCT NAS NBR NBR NAS PCT
CHG VALUE MOS DATE DATE MOS VALUE CHG
1250 0 6/96 7/96 1 1030 -18
35 1390 5 1/97 4/97 3 1200 -14
45 1740 5 10/97 12/97 2 1500 -14
34 2010 7 7/98 10/98 3 1420 -29
256 5050 17 3/00 5/00 2 3160 -37
35 4275 2 7/00 4/01 9 1640 -62
41 2315 1 5/01 9/01 4 1425 -38
44 2055 3 1/02 10/02 9 1115 -46
33 1485 1 11/02 3/03 4 1270 -14
70 2155 10 1/04 8/04 7 1775 -18
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