21 replies to this topic

[U.F.O.]

U.F.O.

P.S. I was there for both events.

Edited by U.F.O., 22 August 2008 - 07:21 PM.

[IYB]

If I can sneak in here, into your ongoing discussion with K wave, UFO, I would point out that while your point is extremely well taken, that a negaitive MACD divergence in and of itself does not assure a negative outcome, I would also point out that neither does it assure a positive outcome as it did in 1990.

But meantime, there is an overriding factor that will very likely determine outcome, and that is the super-cycle, AKA the secular trend. 1990 was smack dab in the center of a secular bull market that extended 18 years - from 1982 until 2000. In fact that secular bull market was the strongest in a century, so naturally, as I pointed out in the first string below, cyclical bear markets within that super-cycle bull were relatively mild. We are now in the midst of a cyclical bear market smack dab in the middle of a (super-cycle) secular bear market which began in 2000 and will likely entend into the "teens", so this cyclical bear is likely to be relatively severe, much like cyclical bear markets in the last 5 secular bears in the 20th century. I believe that this cyclical bear has yet a very long way to go, bear market rallies not withstanding.


Jmho, based on my study and observation of market cycles over time. As always, I respect and appreciate your work as well. Best, D

Edited by IYB, 22 August 2008 - 08:09 PM.

[U.F.O.]

Hey Don, que pasa? I love your input although I don't have a current opinion on supercycles. I can't help in the comment there. I was merely addressing the point previously made that a monthly MACD negative divergence was a market killer. I was informed by a couple of posters that my weekly charts were worthless against the power of the monthly. Ergo, I post the chart above. My point here is the times between 1987 and 1990 were some of the most tenuous in the history of markets and cannot be poo-pooed as incomparable to now. Thank you, by the way, for the compliment on my long call a few weeks ago. You are a gentleman and a friend! Best. U.F.O.

[K Wave]

U.F.O.

P.S. I was there for both events.

Again, noted.

And again , we have already been above the 200 month MA for a record number of years without a touch, with a chart that is starting to "look" tired, and that appears to be begging for such a touch. I use the 72 MA (faster cyan on chart) as "trendicator" of sorts, and when it starts to lose it's angle of ascent, usually a touch of the 200 MA is in order after a long run.

I don't know if you put any stock in fractal patterns, but I have seen them repeat on different time frames often enough to make me a believer. I just recently called the precious metals crash setup real time based upon historical fractal similarities, and action of the leaders in that sector.

Here are a few fractal patterns that look fairly similar. They have a huge base building pattern before a large move to the upside. They made higher highs, while not being confirmed by momentum, after a brief dip below the 72 MA on the pullback during the blast phase off the base. And by the looks of it, the current fractal is weaker than the other two.

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[K Wave]

Here is the aftermath of the first 2 fractals.... Not sayin' we will repeat, but you have to at least allow for the possibility of a return to the base, or at least to the beginning go the final blast, that started in 1994. It HAS happened before....and this is a very long term fractal, so it could take many years....Japan's decline took 13 years.

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[K Wave]

I am just pointing out possibilities...we first need to break some key levels for this scenario to even have a chance of playing out, and thus far, we have not done that. But if we get a monthly close below that monthly 72 MA, I will be on full crash alert, on a longer term basis. If we go on to make new highs and re-establish momo, then obviously all crash bets would be off for this setup.

[U.F.O.]

K, I would pose that the 200 month sma hasn't been relevant in almost 3 decades and isn't now. Saying that it's overdue for a touch is LLLL-Term charting in the vein of Kondratieff waves and such. Great for conversation, poor for actually making money in the here and now. Fractals, no comment here as I am very ignorant on that topic. I'd like to learn more if you'll stay here for awhile and post on them. Thx. for your input. U.F.O.

[K Wave]

I also want to point out one potentially big difference between now and 1990. In 1990, the Dow was bouncing off the weekly 200 MA support. Today, we are below, and potentially about to bounce off the wrong side of that 200 MA. March 08 could have been the equivalent of where the market was "supposed" to bounce and go higher. like 1990, but that low failed...I guess we will find out pretty soon whether or not we get back above that weekly 200, eh? After a long run to the upside, the area between the 200 MA and the 900 MA is known as the "crash window", I can show you countless examples on any time frame, of price "crashing" to the 900 MA, once the 200 has been violated after a long run. Of course, not every case where the 200 is violated makes it all the way to the 900, but like I said, I can show you countless examples where it has. I have also attached a recent daily chart of Silver, to show another, more recent, example of the crash window in action...

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Edited by K Wave, 22 August 2008 - 09:21 PM.

[U.F.O.]

K, my E-Signal feed just went dead. I'll be back here tomorrow when I can chart and I'd love to chat some more. Best U.F.O.

[kc135a]

I am just pointing out possibilities...we first need to break some key levels for this scenario to even have a chance of playing out, and thus far, we have not done that.

But if we get a monthly close below that monthly 72 MA, I will be on full crash alert, on a longer term basis.

If we go on to make new highs and re-establish momo, then obviously all crash bets would be off for this setup.

My long term take has been driven for several years by the 40 year cycle which is to bottom Fall of 2014. Since tops typically come in years ending in "9" and some times "0" that puts the final top next year and then a severe crash into initially 2012 and then a final bottom into Fall 2014. By the way, the Fall of 2014 is also the bottom of the 80 and 120 year cycles.

I have always wondered what would be the catalyst for such a crash but I believe the break down in the credit markets pretty well answers that question.

KC