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Saturday, March 15, 2008 1:43:52 AM
Call me nuts, but I'm becoming more convinced of my interpretation of the indicators saying that we're getting "very" close to a bottom. A Rally is just around the corner, maybe we'll see another few hundred point downward move in the Dow but that's about it. Here's my explanation. (and I sure hope I'm right, cuz nobody wants the system to collapse entirely. Feel free to ignore this blather of mine, if u think it's nonsense.
I'm entitled to blurt out my opinion on my own board, right... lol )
My first reason: Don't Fight The Fed! I realize this is a corny old adage, but keep in mind that the government's doing everything within their abilities to fix this and save it from a collapse. Kinda like giving defibrilator shock to a person suffering from heart problems.
How important is this fundamentally? about 5 out of 5.
Second reason:
Several long term support levels which are rather hard to break through. Matter of fact the only time we fell through towards and touched the 200ma in 30 year chart was after the Dotcom boom. Obviously, the dotcom boom was a bubble that needed to burst.
Now, were we in a huge bubble in the last 5 years?
How important is this technically? about 5 out of 5.
Third:
bullish percent
courtesy of MikeAnthony at Extreme Stock Charts board #board-6378
How important is this technically? about 4 out of 5.
4th:
Volatility index shot through the roof, bound to come down very soon
How important is this technically? about 3 out of 5.
5th:
New High New Low indicator pointing to oversold
How important is this technically? about 4 out of 5.
6th: We're still holding within the 5 year bull trend, each time we fell through it turned out to be a head fake. Now we all know that what matters most is the closing price not the temporary pierce-through which we often call "close calls".
7th: Nasdaq is about 500points away from the 200dma on a 30 year chart. If we do fall through, it's going to be fast and quick that the recovery will be even stronger than we'd like it to be.
Even if the market drops further, it can not be THAT bad. So all this doom and gloom is unwarranted and overblown in all my honesty.
Compare to 2001->2003
nasdaq droped 4000 points, which was 80% if nasdaq drops 80% from here, we'd be at 580ish... lol
I would certainly start buying as it gets even remotely near the 200 day moving average, so would a ton of other investors.
580? LOL... I foresee an unprecented buying stampede at those lows. Highly doubt we'll drop 80%.
I am seeing a 5%~12% possible drop at a maximum, that is "IF" we are to see a drop. Definitely not 80%. This is because we're already down 25% from highs and average bear-market declines inthe past have been around 37% based on historical data.
How important is this in terms of knowing the limits on how low we can possibly go? about 5 out of 5.
8th reason: Bear markets end when we least expect it. There's an end to everything.
We're already about 5 months into this bear market. Since most analysts are comparing this potential recession/bear market to 1990-91 due to the economic similarities, lets take a wild guess at how long that 1990/91 bear market lasted: if u said 6 months you'd be wrong.
Just 3 months in 1990-1991!! Historical average length of ALL bear markets is 18 1/2 months, but if we count the recent bear markets in nasdaq it's known to be much shorter.
How important is this in terms of overcoming our emotions? about 5 out of 5.
9th reason: Bull market starts when things look absolutely horrible. If you think you're so smart that you can see a bull/bear market begin and end, then kudos to ya. However, fact is that most people can't tell. Consider this, why else would people sell during absolute market bottoms like 1988, 1991, and 2003? Is it because they are dumb? I don't think so because some of those sellers are fund managers , institutions themselves. lol
Fact is, a bottom will come very silently. The only way we will know with 100% accuracy is through hindsight, or psychic clairvoyance.
10th reason: Bear markets create very nice buying opportunities. For long term investors, it's much better to dollarcost average exactly during moments like this. The more people realize this, the quicker we'll get out of the bear market. Interestingly, this is hypothesized as the reason why recent bear markets don't last very long thanks to the information-age and internet. (everyone has access to the critical info at their fingertips, automated trading, etc)
I'm entitled to blurt out my opinion on my own board, right... lol )
My first reason: Don't Fight The Fed! I realize this is a corny old adage, but keep in mind that the government's doing everything within their abilities to fix this and save it from a collapse. Kinda like giving defibrilator shock to a person suffering from heart problems.
How important is this fundamentally? about 5 out of 5.
Second reason:
Several long term support levels which are rather hard to break through. Matter of fact the only time we fell through towards and touched the 200ma in 30 year chart was after the Dotcom boom. Obviously, the dotcom boom was a bubble that needed to burst.
Now, were we in a huge bubble in the last 5 years?
How important is this technically? about 5 out of 5.
Third:
bullish percent
courtesy of MikeAnthony at Extreme Stock Charts board #board-6378
How important is this technically? about 4 out of 5.
4th:
Volatility index shot through the roof, bound to come down very soon
How important is this technically? about 3 out of 5.
5th:
New High New Low indicator pointing to oversold
How important is this technically? about 4 out of 5.
6th: We're still holding within the 5 year bull trend, each time we fell through it turned out to be a head fake. Now we all know that what matters most is the closing price not the temporary pierce-through which we often call "close calls".
7th: Nasdaq is about 500points away from the 200dma on a 30 year chart. If we do fall through, it's going to be fast and quick that the recovery will be even stronger than we'd like it to be.
Even if the market drops further, it can not be THAT bad. So all this doom and gloom is unwarranted and overblown in all my honesty.
Compare to 2001->2003
nasdaq droped 4000 points, which was 80% if nasdaq drops 80% from here, we'd be at 580ish... lol
I would certainly start buying as it gets even remotely near the 200 day moving average, so would a ton of other investors.
580? LOL... I foresee an unprecented buying stampede at those lows. Highly doubt we'll drop 80%.
I am seeing a 5%~12% possible drop at a maximum, that is "IF" we are to see a drop. Definitely not 80%. This is because we're already down 25% from highs and average bear-market declines inthe past have been around 37% based on historical data.
How important is this in terms of knowing the limits on how low we can possibly go? about 5 out of 5.
8th reason: Bear markets end when we least expect it. There's an end to everything.
We're already about 5 months into this bear market. Since most analysts are comparing this potential recession/bear market to 1990-91 due to the economic similarities, lets take a wild guess at how long that 1990/91 bear market lasted: if u said 6 months you'd be wrong.
Just 3 months in 1990-1991!! Historical average length of ALL bear markets is 18 1/2 months, but if we count the recent bear markets in nasdaq it's known to be much shorter.
How important is this in terms of overcoming our emotions? about 5 out of 5.
9th reason: Bull market starts when things look absolutely horrible. If you think you're so smart that you can see a bull/bear market begin and end, then kudos to ya. However, fact is that most people can't tell. Consider this, why else would people sell during absolute market bottoms like 1988, 1991, and 2003? Is it because they are dumb? I don't think so because some of those sellers are fund managers , institutions themselves. lol
Fact is, a bottom will come very silently. The only way we will know with 100% accuracy is through hindsight, or psychic clairvoyance.
10th reason: Bear markets create very nice buying opportunities. For long term investors, it's much better to dollarcost average exactly during moments like this. The more people realize this, the quicker we'll get out of the bear market. Interestingly, this is hypothesized as the reason why recent bear markets don't last very long thanks to the information-age and internet. (everyone has access to the critical info at their fingertips, automated trading, etc)
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