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Strategies & Market Trends : Waiting for the big Kahuna
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To: paulmcg0 who wrote (17302)4/25/1998 7:34:00 PM
From: Vitas   of 94695
 
Re: crash

I don't see a "crash" in this time frame for 3 reasons.

1. The Mac sum oscillator is at a very high nominal reading.
Now that does not rule out serious corrective action, which the triple declining peak pattern I think is projecting. Then again, I get a big kick from those that thought Oct. 1997 was a "crash".

2. William O'Neil , editor of Investors Business Daily, pointed out in the late 80's that there is a 23 year up cycle in the market, followed
by a 17 year down or sideways market. Back then I went through
a long term chart and it is a valid point.

3. The "crash" of 1987 was a douzy, and it happened within
O'Neil's cycle. But it started from a Mac sum oscillator reading of
1500.

In retrospect it was a pullback from a breakout which occurred on the first trading day of 1986. If you look at it on a LONG term chart with
a linear regression channel drawn in you will see that since 1789
the market stayed within that channel up to 1985.

In 1929 it pierced the upper band and quickly came back down within it (understatement). In 1986 it broke out above it and has never returned. If you think of the market as a stock, it broke out (1986), pulled back near to the breakout point, the crash of 1987, and has never returned.

If you take one look at that chart you will be spellbound by that breakout.

Vitas
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