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Strategies & Market Trends : Longer-Term Market Trends
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To: AllansAlias who wrote (1982)11/8/2008 1:01:51 PM
From: Perspective  Read Replies (1) of 3209
 
I think the most enlightening information I've gleaned from this experience has been

1. While the Dow 30 had some holdouts that didn't cave until the very last leg down, they ALL cratered in the end. Every single one I've found charts for. Down 50% and more. We won't find stuff like DIS, PG, and MCD hanging in close to the highs while the market bottoms. Not likely given the historical precedent.

2. The ones that caved early just dragged along the bottom for the whole year while the rest of the market cratered around them.

3. This is the real biggie: the 1974 low was actually a retest of the 1970 low. And it failed briefly. This is the kind of behavior I had expected to see here, even before I closely examined the 1973-4 bear. A similar structure would have us retest the 2002 low, and break it if only briefly.

Of course the market can do anything on any given day. We must all be positioned to accommodate any movement that should occur. However, given the historical precedent, I conclude the risk/reward continues to favor short positions, now targeting the strongest holdouts. (News to you, right Patron? <G>) Now I've got some historical data and charts to back up my suspicions.

We should be lucky if this is no worse than a repeat of 1973-74.

`BC
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