chubbie, my main and ultimate analysis technique / decision making tool are Hurst Cycles (but I do look at some "classical" T/A as well to cross-check what I think the cycles are telling me), and from cylical standpoint, "ideally" we should rally out of this Monday's low all the way into mid-March at least, and possibly more, where most (if not all) indexes will go to new 52-w highs. When I say "ideally", it means that the price action will/should continue to follow the cyclical ideal.
however, we are possibly at an "inflection" point from cyclical standpoint as end of 2004 is where one would expect the left-translated cycle high to occur (for the [G2] 4-4.5 year cycle). Furthermore, UNLESS we rally, then this Monday is NOT the 20-w low (and G1 40-w low), and combined with the fact we are in the neighborhood of the left-translated 4-4.5 year cycle, it would be EXTREMELY bearish for the market, as that would in all likelyhood entail a sell-off all the way into the end of the year (with some spectacular dead-cat bounces along the way of course). I am not much in favor of this scenario right now as that would entail an apparent cyclical "inversion" for the 20-w/G1 40-w low, plus some other non-ideal cyclical stuff, but it is a possible/likely scenario.
so, my primary cyclical scenario is that we are still bullish overall (i.e. since Oct-02 low), and that we should rally all the way into (at least) March, and possibly into Summer as well. however, the alternate scenario is that we are very BEARISH because we are possibly at the above described inflection point.
a point to remember is that the fundamentals, or more accuratly imvestors/traders PERCEPTION of the fundamentals is what drives the market; HOWEVER, the market action will follow the path dictated by the cycles. so, imho, right now the market is trying to make up its mind which way it wants to go, and once it does make up its mind, the PATH that it follows will continue to be dictated / mapped out by the cycles.
or to put it in another way, in bull markets the cyclical lows are (in general) higher lows, while in the bear markets they are (in general) lower lows - but the cycles are always there, regardless whether it's a bull or bear market.
re. the fundamental issues like P/E or semi's book-to-bill data, I purposely do NOT look at that data becuase I've learned the hard way that it only impairs my judgment calls and screws up my trading; so, I can't comment on that, sorry.
I will also agree that at some point there will be a bear market like 1966-1982 (or even bigger / longer), but I am not convinced that we are there YET. The 1966 top came 34 years from the 1932 bear market bottom; we are only 23 years from the 1982 bottom, and an argument can be made that there is a 50-55 year cycle in the stock market (i.e. Kondratieff cycle) as 1982 is 50 years from 1932, and there were huge stock market crashed in 1870s as well as in 1820s (as chronicled in "Devil Take the Hindsight"). Curiously, 23 years is exactly where a left-translated 50-55 year cycle high would occur, and 34 years is pricesly where a RT 50-55 year cycle high shoudl occur.
So, assuming that all of us are still around, I think about 2032 is going to be a GREAT TIME to buy some stocks; the tough question is what happens between now and 2032, i.e. how long can we rally - if we take the 1932-1982 analog, then we should top in 2012 (a RT 50-55 year cycle) - which is interestingly the exact year predicted by R.N. Elliot some 60 years ago as the ULTIMATE stock market top; furthermore, and curiously, there are lots of various other events pointing to year 2012, for example the Mayan Calendar (which is extremely accurate) ends in year 2012. So, even though Mayans are long, long gone, they mapped out their calendar hundreds/thousands of years in advance, but somehow that calendar ends in 2012 - and nobody know why, or what exactly is supposed to happen in 2012. Maybe it's a very, very, VERY long cycle (because a calendar really is nothing more than a stable, repeating cycle) signfying the end of the world (there are also some biblical analysis pointing to year 2012 as well)????? which would not only be the ultimate stock market peak but also the ultimate peak of the human race?????
anyway, getting way off topic (and way too depressing), but I'll take the market action one 10-w cycle at a time, and not try to worry if and when the BEAR is again to rear its ugly head, because once it does, we should realize that pretty soon, and that will give us plenty of opportunity to go short.
just my $0.02, or, lol, more likely like $2,000,000.
AI
