Posts Tagged ‘historical charts’

  • Traders Market
    , November 23rd, 2008 at 10:27 am

    If this chart doesn’t make that point clear, nothing will.


  • Warren Buffett
    , October 17th, 2008 at 11:50 am

    is “the world’s greatest investor” and when he starts buying stocks in his personal account that is definitely worth noting. I do not think that Mr. Buffett’s intent was to call “the bottom”, for he is a patient investor who expects there to be volatility. I am not going against Mr. Buffett or making a market call, only bringing to light the similarities of the 1929 chart and the current Dow chart. We remain in a bear market and you cannot let your guard down for any reason whatsoever. If prices continue higher, raise your stops on longs. If prices start to decline do not be a fool and hold on just because it is the popular thing to do.

  • Some Historical Bear Market Perspective
    , October 11th, 2008 at 8:36 am

    Dow Jones October 1929
    Over a 23 day period, the Dow lost 49% of its value, but that was just the start of the bear market during which the Dow would eventually lose 89% of its value (386.10 to 40.56). How many people do you think called the October 1929 low of 195 “the bottom” only to get decimated by the continued weakness over the next 3 years? We remain in a bear market and ALL rallies should be treated as guilty until proven innocent, meaning you need to maintain a super strong defense. Do not be too quick to call Friday’s low “the bottom”, there are serious flaws in our economic system and a lot of closets with ugly contents are still being opened.

    Dow Jones 1929-1933
    Notice how insignificant October 1929 becomes when viewed on a larger timeframe.

    Dow Jones October 1987

    S&P 500 (SPY) 2000-2003

  • Bear Market of 2000-2003
    , October 8th, 2008 at 9:51 pm

    During the 2000-2003 bear market, the SPY made 9 significant drives lower and 8 recovery rallies. The average decline was 18.85% and the average recovery rally was 17.40% which means the market recovered an average of 73.06% of the prior loss. The speed and magnitude of the rallies in a bear market are quite seductive, but being early is just not worth the losses.

    These numbers are just averages, there are always outliers and the current decline is unprecedented at least in my 16 year trading experience. If you are attempting to latch onto a counter trend rally remember that it is a high risk strategy, you must wait for price to confirm a possible turn before getting involved and then manage risk. As we saw today, there were many reasons to think the market would reverse higher, but those reasons were quickly dismissed by the market as prices faded in the last hour. Do not stubbornly hold when the market tells you to sell as it did today, there is always tomorrow to try again if you still have your capital intact.

    Notice the DIRECTION of the 200 day (40 week) MA, it did not turn higher until April/May 2003. As long as the 200 DMA is declining all rallies should be expected to fail.


    See the 1929-1933 Dow Chart

  • 1929-32 Rallies
    , October 8th, 2008 at 1:56 pm

    Historical perspective of bear market rallies.

  • 1929 vs Today
    , October 7th, 2008 at 9:19 pm

    We are in a brutal bear market when and at what level it bottoms is only known by liars. Below are some charts from the 1929-1932 bear market and a current Dow chart. Do not get sucked into thinking it cannot go lower. It seems like the market is due for a bounce, but the evidence just isn’t there yet.

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