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Hi Ira,
I thank you for the compliment regarding the 103
(almost 104) year chart.
Both the 4 year chart and the 103 year chart are
semi-logarithmic. As I am sure you are aware, semi-logarithmic plotting
allows for the comparison of 1 point moves in a 100 range market, 10 point moves
in a 1000 point market, and 100 point moves in a 10000 point
market.
I am puzzled by your statement that the market is
still a bull, for a couple of reasons.
First, as you noted, it is necessary to define the
time frame within which one makes that statement. If that time frame is 4
years, then clearly this is a bear market, and as John Bollinger has noted the
current upswing is a secular bull market within that larger bear market. I
suspect the secular bull is over.
Second, if that time frame is the period from the
lows of 1974 (or by my charting from the lows of 1982), we are still in a bear
market as we have penetrated the downside of the channel or channels which could
reasonably define the upward movement during that time frame.
If, however, we define the bull market as being
those levels of the DJIA which do not fall below the line drawn between the lows
of 1932 (if memory serves me) and 1982, then we may still be in a bull market,
and you would be correct in stating that a 50% +/- reduction in the DJIA to meet
the 103 year support trend line would not negate that bull market - but the
"bull" market in those circumstances would be far different than what the
investing institutions and general public have come to accept.
I quite agree with your observation that the
DJIA of 1920 is different from the DJIA of 1950 and from the DJIA of
1980. Other than semi-logarithmic charting, I do not know how one could
conceivably adjust for the replacement of buggy whips with ignition keys,
or the replacement of manual scribes with word processing, or any other of a
myriad of technological changes which we have experienced, let alone
the repeated re-calibration of the DJIA.
As to your question regarding the data, it is raw
DJIA data for all periods as supplied by Reuters through MetaStock. As I
understand the data, it is the DJIA as it has been recorded
historically.
Having said all of that, it is interesting to
observe that the DJIA appears to have "bounced" upward off of the mid-point of
the 103 year channel. That mid-point of the 103 year channel and the
upper bounds of the 4 year bear channel are
currently the operative factors (ignoring Fibonacci retracements and other
technical measures).
Perhaps a creditable hypothesis can be posited for
the acceleration of the DJIA from the lowest lows of the last 4 years to new
highs well in excess of 12000.
But on the basis of my charts, I remain to be
convinced.
FWIW,
Tony Pylypuk
----- Original Message -----
<BLOCKQUOTE
>
<DIV
>From:
Ira
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Monday, November 17, 2003 10:26
AM
Subject: Re: [RT] INDU
Great chart. A keeper. It more
clearly shows that the market is still a bull. This is a logarithmic
chart, isn't it? This is the second leg up from the 74 low.
and the breakout over the impenetrable 1000 high of years gone by. Could
the 10,000 high be a replication of the 1000 high of years gone by? One
of the things to remember is that the Dow of the 20's is different from the
Dow of the 50s which is different then the Dow today. The divisor is
different and the volatility greater. The powers keep changing the
makeup of the Dow. The replacement of stocks and stock splits keep
reducing the divisor. So a 100 point move today is not comparable to 100
point move in the 60s, 70s, or 80s. The chart is labeled the Dow, but is
it a true chart or we comparing apples to oranges. In any case, a
move down to 5000 would be a little more then 50% retracement and the Dow is
in an up channel. Just one persons opinion. Ira
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Tony
Pylypuk
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Monday, November 17, 2003 5:09
AM
Subject: Re: [RT] INDU
Attached is a 103 year chart of INDU. It
more clearly shows the time frame within which I believe the current "4
year" bear channel operates.
With respect to Ira's observation that an
horizon greater than 4 years is bullish, I would note the chart suggests the
figure should be 15 years, more or less, measured from 2000.
FWIW
Tony Pylypuk
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Ira
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Monday, November 17, 2003 2:51
AM
Subject: Re: [RT] INDU
I think it is time to things in
perspective. Is this a bear market? It depends how you define
a bear market. Have a lot of people lost a lot of money?
Yes. Have a lot of people made a lot of money? Here is a
weekly chart. If this was a stock you would consider this just a 50%
retracement of a bullish move from the 1994 low. How much of a
retracement from the '87 low? or the '74 low? It is all in the
way you look at things. On a monthly chart the high in 2000 and the
low in '03 were both targets. Are there targets higher?
Yes. Are there targets lower? Yes. But on different time
frames. So whether this is a
bull or bear, whether it will go higher or lower is strictly dependent
upon where you view the picture. If you have a 4 year
horizon or longer, this is nothing more then a retracement in a long
running bull market. If you are looking at 4 years and shorter
you are in a bear market. So when you refer to bull or bear,
up or down, please reference the time frame you are talking
about. On the daily chart we have hit
targets and can look for a retracement of this move up from the March 10
and July 1 lows. Right now there is no sell signal, just an exit
scenario. I have no Entry Point for a down trade as yet on the daily
chart or the 60 min. The 15 min. and 3 are different stories.
So if you express an opinion, please reference it. Thank you, Ira.
---- Original Message -----
<BLOCKQUOTE
>
<DIV
>From:
Mark
Simms
To: <A
title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Sunday, November 16, 2003
9:30 PM
Subject: RE: [RT] INDU
<FONT color=#0000ff
size=2>Uh.....we've been outside of either bullish channel for almost 18
months....
I think
the time alone invalidates any continuation of the "old" bull
trend.
<BLOCKQUOTE
>
<FONT face=Tahoma
size=2>-----Original Message-----From: Tony Pylypuk
[mailto:tpylypuk@xxxxxxxxxxx]Sent: Sunday, November 16,
2003 9:21 PMTo: RealTradersSubject: [RT]
INDU
Attached is a chart of the DJIA.
Every bit of recent news is
bullish. The chart may suggest another
interpretation.
FWIW
Tony Pylypuk
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