Dow TOP call - 10yr top formation done

[JSSPMK]

Quote from Petsamo:

This is absolutely dispicable. Steal from the rich, give it to the irresponsible government and the lazy that created the debt. So the government will be free to run up the debt again! Legalized theft! Only a leftist can come up with such a plan! And this idiotic professor is on public payrolls!

I see sense in the proposal, alternative is doom & gloom. Afterall, he is suggesting paying that tax after a person dies. Preservation of balance is pretty important to warrant stability, wouldn't you say? After all, you can't benefit from your physical pocessions in the after life. I know it may seem UNFAIR to some people, but what would you rather have fair & riots all over the place & a deflatory environment or unfair to the ones that can afford to lose 20% which in turn acts as a financial reset button & a whole country can move on & progress? Think about it for a moment. Don't forget that tax is legalised confiscation anyway, as long as a country benefits it is an acceptable practise IMO. Also if most were born to make great money then the ones that have loads now would naturally have less, as wealth would have to be re-distributed, just like Germany can be Germany because other EU countries can't match Germany's ability to be Germany

 

[trefoil]

The below chart of the monthly Dow is from The Privateer, a gold site (click on the image to go to the original at the site):








I copied the image into the MS Paint program, did the red lines you see bordering that gray shaded area, filled it in with that gray color, stared at it, and thought to myself "Damned if that don't look like a megaphone!"
So I looked up "megaphone technical pattern" and all kinds of sites popped up explaining the significance. Basically you get three higher highs and an equal number of lower lows until the bottom line is taken out and you get the final fall. This site is the least objectionable one I could find from the POV of self-promotion.
So, in the very long-term, this is extremely bearish of course. In the timeframe covered by this thread, however, it's extremely bullish.
It's always been my opinion that a higher high will have to be established in this cycle to accomplish the final slaughter of the bulls. I've always thought this was how it would end, but I didn't know it had a name. Now I do.
As I said to deadbroke in some other thread he opened, he's not really right: while it's true lower lows are in our future, in my opinion, those lows are only going to happen after this bull is over. Meantime, there's money to be made, lots of it.

 

[Nine_Ender]

Quote from trefoil:

The below chart of the monthly Dow is from The Privateer, a gold site (click on the image to go to the original at the site):








I copied the image into the MS Paint program, did the red lines you see bordering that gray shaded area, filled it in with that gray color, stared at it, and thought to myself "Damned if that don't look like a megaphone!"
So I looked up "megaphone technical pattern" and all kinds of sites popped up explaining the significance. Basically you get three higher highs and an equal number of lower lows until the bottom line is taken out and you get the final fall. This site is the least objectionable one I could find from the POV of self-promotion.
So, in the very long-term, this is extremely bearish of course. In the timeframe covered by this thread, however, it's extremely bullish.
It's always been my opinion that a higher high will have to be established in this cycle to accomplish the final slaughter of the bulls. I've always thought this was how it would end, but I didn't know it had a name. Now I do.
As I said to deadbroke in some other thread he opened, he's not really right: while it's true lower lows are in our future, in my opinion, those lows are only going to happen after this bull is over. Meantime, there's money to be made, lots of it.

Interesting how this chart around 1984 ( approx. ) is similar to now. And look what the Dow did from 1984-1999. I don't personally think long term technicals on the Dow mean much of anything at all.

There is a strong chance that lower lows are not in the future at all. This idea seems to upset people, I'm not sure why.

 

[MKTrader]

Quote from Nine_Ender:

Interesting how this chart around 1984 ( approx. ) is similar to now. And look what the Dow did from 1984-1999. I don't personally think long term technicals on the Dow mean much of anything at all.

There is a strong chance that lower lows are not in the future at all. This idea seems to upset people, I'm not sure why.

I'm not sure of the Megaphone's significance either, but where are you getting your "strong chance that lower lows are not in the future "? Is that based on anything other than opinion?

Could the Dow over the next 20 years not look like the Nikkei from 1990 to present? Why not?

 

[JSSPMK]

<object width="480" height="385"><param name="movie" value="http://www.youtube.com/v/IpU8TZAsXL8?fs=1&amp;hl=en_GB"></param><param name="allowFullScreen" value="true"></param><param name="allowscriptaccess" value="always"></param><embed src="http://www.youtube.com/v/IpU8TZAsXL8?fs=1&amp;hl=en_GB" type="application/x-shockwave-flash" allowscriptaccess="always" allowfullscreen="true" width="480" height="385"></embed></object>

 

[trefoil]

Quote from Nine_Ender:

Interesting how this chart around 1984 ( approx. ) is similar to now. And look what the Dow did from 1984-1999. I don't personally think long term technicals on the Dow mean much of anything at all.

There is a strong chance that lower lows are not in the future at all. This idea seems to upset people, I'm not sure why.

Don't take it too seriously. I don't. It just dovetails with the very long term scenario I keep in the back of my head. Whether it all works out according to the rules of the megaphone is kind of academic, as you and I would only start to have an argument around Dow 14 or 15k. Not exactly losing sleep over this any time soon.

 

[SarahNGuyen]

Guys, do you realize we have way too few historical data when it comes to long term trends (a 100 years history? give me 1000 of them and we start discussing VALID statistics) and can only base our assumptions on very unreliable patterns.

Basically we just don't know. So just make your bets and manage your risks!

 

[MKTrader]

Quote from SarahNGuyen:

Guys, do you realize we have way too few historical data when it comes to long term trends (a 100 years history? give me 1000 of them and we start discussing VALID statistics) and can only base our assumptions on very unreliable patterns.

Basically we just don't know. So just make your bets and manage your risks!

I agree. I brought up the Nikkei as a counter-example to "in the long-term, stocks always go up" or "stocks have always made gains in rolling 20-year periods and always will," etc.

U.S. stocks have certainly had an upward bias but you're correct; there's not enough data to get anything statistically significant for 100+ year periods. Since global stock markets are quite correlated, the Nikkei appears to be quite the anomaly. And if you adjust for inflation, there was a 25+ year period starting with 1929 when U.S. stocks had no net gain. That's bad but the Nikkei has been even worse. The Nasdaq starting in 2000 may end up in a similar situation.

 

[Nine_Ender]

Quote from MKTrader:

I'm not sure of the Megaphone's significance either, but where are you getting your "strong chance that lower lows are not in the future "? Is that based on anything other than opinion?

Could the Dow over the next 20 years not look like the Nikkei from 1990 to present? Why not?

The drop to 6547 was an abnormally large drop and if you look at what has occurred after similar drops on the chart those drops were not revisited. Basically people suggesting the drop will occur are predicting an imminent 4000 point drop in the Dow which is highly unlikely. Those wishing to profit from that drop are too late ( it went down, then up; the easy money is gone ).

Tell me something. Did the Nikkei prior to 1990 rebound strongly similar to the 6547 to 10500 move ? Are you suggesting the US will enter a prolonged period of delation similar to Japan ?

 

[MKTrader]

Quote from Nine_Ender:

The drop to 6547 was an abnormally large drop and if you look at what has occurred after similar drops on the chart those drops were not revisited. Basically people suggesting the drop will occur are predicting an imminent 4000 point drop in the Dow which is highly unlikely. Those wishing to profit from that drop are too late ( it went down, then up; the easy money is gone ).

Tell me something. Did the Nikkei prior to 1990 rebound strongly similar to the 6547 to 10500 move ? Are you suggesting the US will enter a prolonged period of delation similar to Japan ?

Yes, it retraced about 50% from its first major down leg. Look up $NIKK on stockcharts.com and select a period between the fall of 1989 and early 1991 on a weekly chart.

The Dow did a similar retracement after the first big move down after the 1929-1930 crash.

I'm not saying it will play out exactly like either of those scenarios but it's possible. As for for prolonged deflation, or deflation-followed-by-hyperinflation, etc., those are certainly possible. Right now, nothing gives me any hope that we won't have that sort of train wreck. Hopefully things will change, but that's what it looks like now.

Super low interest rates + QE + propped up zombie banks. That all sounds very familiar. We just don't have the savings or general thriftiness of the Japanese going into this, though...