How you recognize when the uptrend breaks?

[crgarcia]

There's no doubt we have an uptrend -for now-, but until when?

How you recognize when the uptrend breaks?

Are there any other methods than technical analysis?

 

[FAST.AM]

Yes the way thing do it is keep moving stops higher. When the stocks falls like yesterday then youll know.... just keep moving you stops up.. we are at highs now you can use any thing when u have nothing to compare it to

 

[nazzdack]

If a market is making a well-defined, uptrending channel, you can wait for a breakout of the lower boundary and then a failed re-test of the lower boundary before a plunge/crash happens.

 

[Hook N. Sinker]

Quote from crgarcia:

There's no doubt we have an uptrend -for now-, but until when?

How you recognize when the uptrend breaks?

Are there any other methods than technical analysis?

Yes, look for a market that has tremendous absorbing capacity. Otherwise known as a climax top. Leading stocks might be up 100 % in a month or two.

Edwin Lefevre (likely Jesse Livermore) describes a situation such as this in Reminiscences Of A Stock Operator chapter XVII where Mr. Livermore describes owning 72000 shares of Steel and is testifying before a congressional committee.

Mr. Livermore also describes the process where professionals trade stock higher, making a market active enough to absorb the insider's large stock holding. The need to distribute insider stock is still present today. Insiders are still there. Stock underwriters might be, perhaps nearly always are paid in stock and have an interest in working stock prices higher, supporting a stock when price decreases and making the chart look like a nice smooth upward trend. When prices can not be manipulated higher, that is the time to sell. I observe this selling on the decline from the top. Livermore writes of this in Reminiscences Of A Stock Operator chapter XX.

 

[stock_trad3r]

Indexes usually peak when valuations become excessive regardless of the shape of the chart, and when a lage block of selling occurs in a short interval marking a temporary top.

A chart may appear steap when you soom out but when you zoom in it isn't. The DJIA looks very steep presently when you zoom out to the early 1900', but present valuations aren't higher enough to justify it as a bubble.