SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Strategies & Market Trends : Waiting for the big Kahuna
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: bearshark who wrote (31820)10/16/1998 6:16:00 PM
From: Tommaso  Read Replies (4) of 94695
 
The "two tumbles and a jump" and "three steps and a stmuble" of Fosback have to do with either cutting or raising anyof the three:

1. discount rate
2. margin rate
3. reserve requirement

(see Stock Market Logic 38-43)

Fosback claims the "Two Tumbles and a Jump" as "first proclaimed by the author in 1973."

Fosback's evidence is convincing that at least through 1981 this indicator has almost without exception predicted a rising market.

It even worked in the middle of the 1929 collapse, predicting a 28% rally before the resumption of the phenomenal final decline.

Anyone who jumped on the bandwagon yesterday, then, may well turn out to be correct for a few more months.

On the other hand, he lists yields on stocks of under 3% as having a 0% probability of resulting in a rising market a year later. We have been at levels half of this 0% level.

With these mixed signals I am going to stay put in BEARX and take my lumps if we are off to the races again. If the Fed has indeed succeeded in merely inflating the old balloon, I'll just have to find a way to get even shorter at the top.

I have not reasoned out whether the fact that Fosback's figures mostly come from a gold-standard era makes any difference, and if so, how.

Comment and discussion and criticism warmly invited on all points above!

Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News