Heres part of it. On the financialsense. com site Tim Wood.
Then, from the Phase II low, the averages advance some 32 months. This rally was also a bear market rally separating Phase II from Phase III of the bear market and this time around the Industrials were able to move to a new all time high. In the process there was of course, another Dow Theory bullish Primary Trend change. However, the phasing aspect of Dow Theory was again correct and once this rally ran it course, the averages again headed lower. Note that this decline carried the Industrials to new lows, but not the Transports. As a result, a Dow Theory non-confirmation occurred in conjunction with the Phase III low and great values.
So, the moral of the story is that the bettering of the April high was not a so-called “Dow Theory Buy signal.” In reality it only served to reconfirm the existing bullish Primary Trend change. Also, I continue to believe that we are in a similar pattern to that of the 1966 to 1974 period. I believe that the rally out of the 2009 low is synonymous with the advance out of the 1966 low. One difference now is that the bull market period that preceded the 1966 top was only 24 years and the bear market period ran 8 years, which was the historical one-third the duration of the preceding bull market. In this case, the preceding bull market ran 33 years. Therefore, we should be dealing with a bear market of approximately 11 years. So, the unwinding of this bear market should have much further to go. Perhaps, QEII will keep this rally going a while longer. But, I don’t think that QEII or QEIII or even QEIV will ever be able to ultimately save the market from the natural forces. All these efforts are doing are making matter worse and if anything, postponing the inevitable.
Tim W Wood CPA
Cycles News & Views Author
Primary Tel 251.955.2327
AI
