Don,
this may be of interest if your looking for historical
relationships:
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From: PAST PRESENT FUTURES
In recent updates, we stressed the likelihood that the initial decline
in the stock market would be followed by a significant secondary
rally, which could offer a potential major selling opportunity. Over
the past several weeks, the market has experienced a violent rally,
which so far has retraced 82% of the decline off the July 20 high. As
we have stated previously, following the 21 final tops since 1885, the
first declines have been followed by secondary rallies, which on
average have retraced 66%. However, the retracements during these
secondary rallies were as small as 45% and as large as 98%. In 9 of
21, the retracements were at least 70%. Based upon what we have seen
so far, I would say that the geometry is adequate but not outstanding
for the resumption of a bear market. What makes our current time frame
interesting however, is that this "secondary rally" is carrying price
higher into our ideal cycle high dates based upon the 60 and 30-year
cycles. These highs were established on November 9, 1968 and November
29, 1938. In other words, cyclically, we are entering our first valid
time frame for entering short positions. Historically, the secondary
rallies have averaged 1 month, 12 days. Adding this time period to
our October 7 low would project a top on November 19. This fits in
nicely with the completion of our cycle highs. Over the next week, we
will be watching for a sell pattern to develop which would allow us to
enter short positions. However, I am maintaining a flexible attitude
with regard to the long-term prospects for this market. If the 60 and
30-year cycles do not turn prices lower by the end of the year, our
next major cycle completions will not hit until September 1999.
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