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Two things to mention:
1) the nearterm downtrend line has BARELY been broken with an upside move
2) the CAGR has BARELY turned-up from what appears to be the most severe and
lengthy stay below zero for the past 2 decades......
BTW: Nice analysis, but too bad you did not include the period 1980-1983
that marked the last severe downturn.
> -----Original Message-----
> From: Gary Funck [mailto:gary@xxxxxxxxxxxx]
> Sent: Wednesday, December 26, 2001 8:50 PM
> To: Realtraders@xxxxxxxxxxxx Com
> Subject: [RT] S&P Long Term - bull/bear?
>
>
> Attached, is a long term chart of the S&P going back to the
> beginning of the
> two decade long bull market.
>
> Although an uncomfortable proposition for the bears (myself included) this
> chart shows the Sept-2001 drop as being right on target in terms
> of testing
> the long term trend support (a double about once every 6.5 years, or about
> 11%/year). Further, the downtrend line stretching back to the
> Sept-2000 high
> has been broken.
>
> As I type this note, Harry Dent is showing a similar chart using the DJIA,
> showing that it tested the lower linear regression channel and
> bounced. Dent
> is still holding to his demographic case that the boomers don't top out
> until 2007/2008, and he thinks this is "the buying opportunity of the
> century"; he still has a target of 35,000 on the DJIA by 2008 (19% CAGR).
>
> Prechter offers the counterpoint. He showed that: (1) dividend
> rates are near all-time lows, consistent with a market top, (2) Investor
> sentiment is at near all time highs, (3) wallstreet analysts on
> average are
> recommending a 70% exposure to stocks (also a high). Prechter countered
> Dent's demographic case by showing that birth rates mirrored the
> market (as
> measured by the A/D line. Prechter's advice was to stay in cash.
>
> As an aside, when I look at the demographic data, I reach a different
> conclusion than Dent,
> http://csf.colorado.edu/longwaves/2001/msg02125.html
> The way I interpret the data, the stock market more closely
> tracks the rise
> and fall of a younger cohort (25-34) than Dent's aging (25-45) boomer
> cohort. From this perspective, the top was made in 2000, and the market is
> in for a long steady decline stretching all the way out to 2010. I also
> showed separately, that relative to GDP and corporate earnings, the S&P is
> still quite highly valued,
> http://csf.colorado.edu/longwaves/2001/msg02146.html
> and this is inconsistent with a major bottom in the market.
>
> Guess that's what makes a horse race. :)
>
>
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>
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