11 replies to this topic

[IYB]

The current market, when seen in proper context, is nothing more or less than a plain vanilla Intermediate Term down-trend in a Primary Bear Market. Period. Here is a summary of context:

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I. Rather than spend any time detailing the Secular Trend (20/40-year cycle), I'll just mention in passing that this is a Secular Bear Market since the valuation, speculation, and public participation peak of Y2000....till it bottoms sometime in 2016/2020 time frame.

II. The next level down from Secular is the Primary Cycle, and that cycle has gone to Primary Bear Market in September 2011:

http://stockcharts.com/c-sc/sc?s=$SPX&p=M&yr=12&mn=0&dy=0&i=p89236288487&a=181755078&r=259.png

http://stockcharts.com/c-sc/sc?s=$DJW&p=M&yr=13&mn=0&dy=0&i=p19689147270&a=171272749&r=599.png

III. The Intermediate Term Trend has been in downtrend mode since our November 9, 2011 Seven Sentinels Sell Signal, despite the scorching 1000 DJ point counter-trend rally from November 28 to Dec 7 which was driven by an unprecedented (both in scope and nature) 22-nation direct monetary intervention in the form of the EU bail-out:

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=6&dy=0&i=p33883112717&a=230822744&r=9680.png

IV. The Short Term trend is also down, but now getting very oversold, though of course can get much more so in this kind of environment (IT downtrend in Primary Bear Market):

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=2&dy=10&i=p13693619385&a=249375819&r=639.png

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Let's not forget the LAST time markets got caught up in an IT downtrend in a Primary Bear Market. Just sayin'

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&st=2008-05-01&en=2008-10-10&i=p55058039549&a=248624863&r=473.png

Good Trading and Happy Holidays all FF's, Don

Edited by IYB, 14 December 2011 - 12:10 PM.

[JimBecker17]

Great Info Don. Just wanted to add that the spike in your final 2008 chart, from what I recall, was based on TPTB banning short sales on the financial stocks. So big blip right after the waterfall started based on a news/policy change to hold things back. Which worked for a few days.. We are probably in the midst of something historic here, but one day at a time.

[NAV]

The current market, when seen in proper context, is nothing more or less than a plain vanilla Intermediate Term down-trend in a Primary Bear Market. Period.

"Period" ?

Hmmmm...You ain't got lower lows and lower highs on weekly charts, neither do you have higher highs and higher lows on the weekly charts. Classic technical analysis would call that a range behavior. And we are bang in the center of a compression. The context is a "Range" IMO not one of an uptrend or downtrend at this point.

[vitaminm]

How about 4 1/2 year cycle?any thoughts? 2003-2008 2009-2014??

[IYB]

How about 4 1/2 year cycle?any thoughts?
2003-2008
2009-2014??

Hi VitaminM. The "traditional" 4-year cycle "should" have bottomed in 2006, then 2010 had it stayed on-track with the last century, but instead went off-track in the new century, probably being replaced by some sort of "bubble cycle".

I use the 13 month ema now to define the Primary Cycle:



http://stockcharts.com/c-sc/sc?s=$SPX&p=M&yr=12&mn=0&dy=0&i=p89236288487&a=181755078&r=391.png

Best, D

[CLK]

It wouldn't surprise me to see 1300 by Friday or Monday.

[thespookyone]

Nice work D. Thanks.

[Lee48]

This does seem to be quite a confusing market with people looking for a business as usual Santa rally or maybe a Europe or MF global financial fraudulent meltdown..
http://stockcharts.com/h-sc/ui?s=$NYS...id=p56443677103
The wkly $nysi says it's near a short term bottom, yet the vix shows no fear at all. So I stay mostly on the sidelines till next yr.

[dasein]

Don, thanks for your excellent charts and analysis, as usual, though I too would say this is a range, albeit with a down bias (my own). Lee, IIRC you used to use GIM and FAX for parking cash - do you still do so?

[DrSP]

Don, The primary bear market makes all sense. And the seven sentinels for IT is even better. But, why are your round trip trades in minutes? That term is VVVST. If we are following IT, LT context, then shouldn't the trades be IT, LT as well? This question has been nagging for several months now. I feel relieved to post now.