How Do We Nail the Bottom?

[achilles28]

Quote from Brandonf:

I did a video the other day on the traits of most market bottoms. I think it's a good video. You will have to forgive the moving around a lot, scratching my nose all the time etc..I had just had a left side mastectomy three days prior and thus was under the influence of a good bit of morphine at the time of the video..the content is still good though.

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Thats a good analysis. Albeit incomplete.

How do you explain the Nikkie slow motion crash from 1990 to present day.

Where was the near double bottom there?

And how is this market similar and different?

 

[achilles28]

Quote from netedge:

"This is not a typical bear similar to what has accompanied past recessions. More likely a depression.

If you're thinking "dead cat bounce", or "bear market counter", you're likely to do better."

Gnome, you'll see I included stats from the 1929 Great Depression and, although I agree the characteristics are different from the other recessions, the data is still quite meaningful. The first two months in 1932 after the bottom had a 90% upsurge.

Yea, 1932 was 2.5 YEARS after the crash.

We started this crash 5 months ago.

We've still got a good year of Bearish conditions to wreak havoc on markets.

Btw, ask Gnome what fair value is for the S&P assuming recessionary eps.

Thats a far better predictor for true value than statistical inferencing.

DOW @ 14,000 when fair value for underlying was 5,000.

hmm. Whats wrong with that picture?

 

[achilles28]

Why is the S&P so over-valued??

"It's Not! We've Priced In future Expectations of accelerated growth in this new Global (BUBBLE) Economy!!!"

Where have we heard that before?

Remember when all the ET perma-bulls we're clamoring that housing was never gonna drop?!

That we had reached critical mass and there simply wasn't enough land in the country and people were so wealthy and blah blah blah.

Well, this is another one of those.

Hot Air.

 

[HKIB]

My calculation of the market key per Livermore says that the downtrend is over
for Dow, SP500, N225.

 

[SCNinvestor]

HKIB, are you really sure about that? is it really over? I have some suspicion that it is only the beginning.

 

[netedge]

Quote from shortie:

what were historical returns (e.g. 2 weeks, 1 month, 2 months) after the worst weeks and months on your list?

this could give you some ideas about the likelyhood and the extent of the possible bounce.

Good question, I have attached the weekly performance info for the S&P dating all the way back to 1960. The analysis of this data should yeild some very interesting information regarding potential rebounds.

I will attach the monthly performance on a separate post.

 

[netedge]

Quote from netedge:

Good question, I have attached the weekly performance info for the S&P dating all the way back to 1960. The analysis of this data should yeild some very interesting information regarding potential rebounds.

I will attach the monthly performance on a separate post.

You will find the monthly performance data going back to 1960 on the SPX in this file. This one in particular should yeild some useful information on what we can expect from here.

However, past performance is no guarantee of future returns

 

[netedge]

Quote from Jahajee:

Jack Ablin, chief investment officer at Harris Private Bank, said the biggest signs that a bottom has formed will be how investors react to bad news this coming week. He believes investors have engaged in ''slash and burn selling'' with all the news converging at once, and a change in that pattern will be telling.

''I think the bad economic data and earnings are already priced in to an extent,'' he said. ''What I'm looking for is a disconnect with investors where bad economic news or a bad earnings report is greeted by a rally, that will be telling about which direction we're heading.''

This is also one of my favorite methods of determining market direction for the short term. When bad news does not cause downturns in the market and when good news is never good enough to cause the correction to end. I believe this is one of the signs we can look at to get a cue.

 

[HKIB]

To SCNinvestor,

I am monitoring the major market indices plus the 10 sectors of SP500. They were all in the down trend on Oct. 10. But on Oct. 16, the downtrend was over for Dow, Sp500 and XLV (health care). Today the downtrend is over for N225 and the same might be true for Nasdaq 100.

Note that the signal is never a sure thing, it is about 70% accurate in Livermore's time. However, we should not ignore it when the downtrend is over for ALL major market indices.

No matter what you do, being able to manage the risk is the key.

 

[rros]

Quote from Brandonf:

I did a video the other day on the traits of most market bottoms. I think it's a good video. You will have to forgive the moving around a lot, scratching my nose all the time etc..I had just had a left side mastectomy three days prior and thus was under the influence of a good bit of morphine at the time of the video..the content is still good though.

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Thank you for the great video, Brandon. Mark Boucher's line of thought. You can't go wrong waiting for leadership to develop!