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Strategies & Market Trends : John Pitera's Market Laboratory
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Don Green
To: Don Green who wrote (19663)8/4/2017 12:30:20 PM
From: John Pitera1 Recommendation   of 33421
 
HI Don,

I hear you and I misquoted you... or more exactly I put my spin on what you had written. I have been talking to several people this morning some on SI and other who are not.....

I feel the market is very different today and you can't always use the old T/A reliable rules of thumb to project market tops or turns in the markets like was on occasionally accurate in the past.

Don


Don, I have about 4300 posts on the Naked truth thread.... big Kahuna is a Myth.... a thread that was started in May of 1997.... I have 4600 posts on my market lab thread that is 17 1/2 years old.

and my posts on the Naked truth thread were from Nov 1998 into the early 2000 or so.

we knew that it was not a "NEW Paradigm" and that the old rules of market behavior and analysis were no longer valid.... what we did collectively know is that we were in the biggest .com mania and stock mania since the go-go markets of 1967-1968......... you know the top 10 companies in 1968 all went up 10,000 % in the late 1960's and every single one of them was out of businesss by 1972.

So what we experience now..... or even in the late 1990's..... is a story of we have been here before and this type of speculative mania is something that comes along every 30 years.

Our current stock market is no where near the mania of 1996-2000 or 1966 into late 1969..... or what we saw in the 1920's..... or the really wild rambuctious market of 1900-1901.... where the cornering of a single railroad stock the great Northern Pacific..... saw a short squeeze that pushed the price per share to over 1,000$ while similtaneously forcing investors and market makers to be forced to dump almost all of their other shares at what ever price they could get so as to pay the margin on the biggest stock battle by the biggest industrialists backed by the biggest bankers including JP Morgan who I believe was financially backing JJ Hill.

The way stocks trade is always changing. Barry Burns, has a great talk that you should list to on one of his webinar's were he comments how stock trading has changed since the Edwards and Magee Bible of Technical Analysis came out in the 1940's.

Back then... there were fixed commissions and trading costs were huge so people did not trade in and out.
2) you had to pick up the rotorary phone and dial a broker who had to get you a price and it was a laborious process and so people were not at there computers pushing buttons..... and of course, today we have so much of the trading totally automated with computers that are right next to the exchanges to get the millisecond advantage on news and price discovery.

So Barry points out that the stock markets did tend to trend more and also acted differently than they do today.

But the single underlying governor of asset accumulation and asset shifts in allocation continues to be the Mass psychology of crowds... that has not changed and will not until.... the Singularity where the machines take over ........ I remember Art Cashin debating on CNBC back in 2010 as to wether the computers (machines) had already taken over and had changed the nature of markets for good.

I don't believe we are anywhere near that yet...... yes day to day trading is largely driven by algo trading... but the larger macro trends have not been bequeathed to the computers yet.

One day they likely will.

JOhn
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