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Strategies & Market Trends : NetCurrents NTCS -- Ignore unavailable to you. Want to Upgrade?

To: fut_trade who wrote (562)	10/12/2000 5:20:45 PM
From: Patrick Slevin	Read Replies (1) \| Respond to of 8925

My charts only go back to 1960 on the SPX, but the 1987 decline, which I hesitate to call a crash personally, did last more a day. The SPX closed Lower in November than October. It took until July 1989 to make a new High. It caused a lot of changes in the Rules. A lot of Put Sellers were "put" out of business. People who had spent years building equity positions were toppled. But more importantly it had an effect on the entire structure of the economy. People who had money to spend did not spend it for a time. This results in a trickle down effect which is far more permeating than a mere drop in the price of the DJIA. Stock valuations help enable a company to borrow; if they cannot easily get credit they lay people off. The effect rarely gets tagged to the decline in the Markets but that's a core reason for the woes of the average person. I do not know if you were getting out of college during the end of the decade of the 1980s but I would make a fair guess that jobs were not easy to find. During the early 1970s, <US markets have not seen a good solid correction since '74.> Funny you should mention. I went to Engineering college at night. My father had passed in 1970 and I had to support myself so nights was the way I had to go. In 1976, the year I finally got out, there was a class of 122 Civil Engineers. By graduation five got jobs. Four of those were as painters. As in house painters or whatever it was they painted. I'm just saying that bad markets are no fun for anyone. Whether it's a little blip like 1987 or a prolonged torture like the 1970s. It's more than an emotional scar, I think. It can be a life-altering event. <on the monthly chart it doesn't look like much of a big deal> Betcha 1929 does not look like much of an event either. I cannot make it out clearly on your chart but if I recall from my reading by April of 1930 everything seemed back on track. <analyzing trading tactics based on end-of-day SP data, and I had a really good "buy the dip" strategy that gave high returns from 1962 to 1982,> I know exactly what you mean; I have backtested several systems to about 1962, by coincidence, as well and everything gets altered about 1982. There are a lot of reasons for that, and I forget just about all of them. A lot of things were cooking in the early 1980s. Anyway, I do not concern myself with crashes that take weeks to flesh. I concern myself more with salami declines, a term I once read in a Gene Inger report. His definition is a market that just continues to slice off a piece each week or so. It never looks like a crash, it just continually works lower. Crashes, to my way of thinking, are better. They upset people right away. A salami decline just lulls one to sleep until you wake up to realize that the market is at levels not seen in years. Sorry for the length of the reply, I operate on stream of consciousness posting. Everyone is better off when my attitude is whimsical.