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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Les H who wrote (9313)	3/27/1999 1:52:00 PM
From: Ramsey Su	Respond to of 99985

Les, I wonder what does the Nikkei and the Hang Sang looked like during their bubble years? If memory served me right, didn't the Nikkei's PE broke 100 at one time? I think there were some talk about new paradigm, no worries, grow forever type too. Ramsey

To: Les H who wrote (9313)	3/27/1999 7:49:00 PM
From: donald sew	Read Replies (2) \| Respond to of 99985

INDEX UPDATE ================================================ Les, thanks for the following important chart. >>>> decisionpoint.com <<< I have made an observation that is of strong interest. Closely look at the peaks in the the PE curves. Since this bull market started in 1982, everytime the PE curves peaked the market corrected within 6 months to 2 years. The 87 crash occured 2 years afer the PE peaked. in the 3rd quarter of 85. Also notice that there was a peak in early 96 and within 6 months the market corrected. Whats really interesting is that in early 98 the PE curve peaked and of course we corrected in OCT, but look at the rebound. After last years correction the PE curve is not setting new highs. The rebound since OCT only created a spike in the PE curve producing a LOWER LOW implying that there could be another correction within about a year that could be very large. From this chart, I concluded that once the PE curve peaks a correction occurs within 6 months to 2 years of the peak. Of course I wish I could see that charts for 100 years which would be statistically more valid. I am also concluding that even though we already had a strong correction, the last peak was in early 1998, and since the curve is still in a decline another strong correction should still occur within 2 years of early 1998(early 2000). This specific conclusion is not statistically substantiated. If we use that spike in early 1999 as the peak then count 2 years from then which would bring us to early 2001. From this specific chart, it implies that a strong correction should arrive latest early 2001, but feel early 2000 as a better choice. I also noticed that the longer it takes for a correction to occur after the curve peaks, the stronger the correction. The obvious example is the OCT 87 crash where it took 2 years after the curve peaked. Is this an example of the RUBBERBAND THEORY. Keep in mind that this bull market started in 1982 and each time the PE curve peak during this bull run, there was a significant correction. We hear from the analyst/media over and over, that this bull market will just continue. Also we hear the arguement that the market internals(A/D) has been poor for so long that it is less important. This chart shows that it could take a long time(2 years) for a correction to occur. Keep in mind that the A/D peaked in early 1998 at the same time the PE curve peaked. seeya