Trump says stock market is all a big bubble....

[Sig]

It's all about cycles and patterns, which tend to repeat over and over throughout history.

As mentioned prior, this is one of my favorite tables, done by Yardeni Research. It shows the bull and bear market cycles for the S&P 500 since 1929.

Even during the 17 year massive secular bull market run from 1982 to 1999, there were several pullbacks over 20%.

Since the 2008 financial crisis, there has only been ONE significant pullback nearing a "bear market" correction of 20% (according to the table, it was in 2011 at 19.4%).

In other words, since 2011 there has been no bear market pullback of around 20%, and therefore the probability increases of having one in the near future, perhaps post-elections or in 2017, which would confirm the cycle and pattern of the past 80+ years.

http://www.yardeni.com/pub/sp500corrbear.pdf

Predicting there will be a pullback is far far easier than predicting when.

 

[J_Smith]

It's all about cycles and patterns, which tend to repeat over and over throughout history.

As mentioned prior, this is one of my favorite tables, done by Yardeni Research. It shows the bull and bear market cycles for the S&P 500 since 1929.

Even during the 17 year massive secular bull market run from 1982 to 1999, there were several pullbacks over 20%.

Since the 2008 financial crisis, there has only been ONE significant pullback nearing a "bear market" correction of 20% (according to the table, it was in 2011 at 19.4%).

In other words, since 2011 there has been no bear market pullback of around 20%. It's another piece of evidence for long term investors to remain cautious about the S&P at current levels.

http://www.yardeni.com/pub/sp500corrbear.pdf

I have seen so called "professional" traders laugh at elliot wave theory, just because they do some very short term momentum trades, which any child could do - in fact, most children now would be able to do much better short term trades than adults, thx to the advancements in online gaming.

Deciphering crowd behavior, using geometric and mathematical calculations, based on price movement over time, well, let's just say any ordinary Joe Soap will find it very difficult to understand even the basics!

J_S

 

[J_Smith]

Predicting there will be a pullback is far far easier than predicting when.

When you have major political events affecting large buy siders, then YES!

Under "normal" conditions, it is possible, by some, to predict with very good accuracy - within 2-4 weeks, when the actualTop or Bottom will occur - again, without any major Black Swan events.

J_S

 

[Sig]

When you have major political events affecting large buy siders, then YES!

Under "normal" conditions, it is possible, by some, to predict with very good accuracy - within 2-4 weeks, when the actualTop or Bottom will occur - again, without any major Black Swan events.

J_S

Are you "some"? If not I'd like to see one of these predictions, and not the stopped clock right twice a day kind that have identified 25 of the last 2 bear markets.

 

[ScalperJoe]

Under "normal" conditions, it is possible, by some, to predict with very good accuracy - within 2-4 weeks, when the actualTop or Bottom will occur - again, without any major Black Swan events.

J_S

Personally, I think if one has a broader time horizon, then buying the "bottom" provides an opportunity to use cash to BUY THE DIP when others are buried holding losing positions. Regarding doing this within 2-4 weeks with "very good accuracy" is doubtful, at least for me.

I'm looking at the overall cycles from 1929, where the bear market corrections on S&P average 34%, thereby putting the S&P at or around the 1,500 to 1,600 level on the next bear market correction, if the S&P has the "actual top" around the 2,200-2,300 range. Could it overshoot on the downside as well? Probably, however the market has always recovered regardless of draw, so it really doesn't matter if you get the actual bottom.

 

[J_Smith]

Personally, I think if one has a broader time horizon, then buying the "bottom" provides an opportunity to use cash to BUY THE DIP when others are buried holding losing positions. Regarding doing this within 2-4 weeks with "very good accuracy" is doubtful, at least for me.

I'm looking at the overall cycles from 1929, where the average S&P pullback is 34%, thereby putting the S&P at or around the 1,500 to 1,600 level on the next bear market correction, if the S&P has the "actual top" around the 2,200-2,300 range. Could it overshoot on the downside as well? Probably, however the market has always recovered regardless of draw, so it really doesn't matter if you get the actual bottom.

It is all relevant - if daytrading one need not worry or bother about longer term opinions.

If you have money, then, it is easy make money - providing of course you do not take on too much risk, and drawdowns of say 10% of your capital do not bother you.

Scared money never wins - aka, high leveraged traders.

Reality - no good looking at daytrading though, if you are not available to trade the key times.

J_S

 

[J_Smith]

Are you "some"? If not I'd like to see one of these predictions, and not the stopped clock right twice a day kind of have identified 25 of the last 2 bear markets.

Some years ago it was started to be explained to me, with charts - but as I had no interest in this approach (compared to daytrading) I did not follow thru - all I will say is that geometric ratios are used, with uncanny results - the low following the 2007 sell off was called to within a few days - does anyone believe me, well, I couldn't care less - I am only interested in what I believe!

J_S

 

[birzos]

Of course, Tulip Mania, the central banks are trying to buy time expecting that the economy will rebound, however, there's a problem. What happens if the economies don't rebound in time and the only thing propping them up was the easy money. It's just history repeating itself, the only question is how big is the bubble, but you don't want to know that because the truth hurts!

 

[J_Smith]

Any person who decides to risk their money in the markets, should, to the best of their ability, limit their risk (in relation to desired reward) and make sure that no matter what happens - they never ever risk too much on any one trade.

The main reason why most lose, is, not due to their inability to call market direction, but due to their inability to control how much they lose on each trade taken - ignoring the mail does not make bills go away, it just prolongs the agony and makes matters worse!

The better the control, the better the results - as it then just becomes a matter of time!

J_S

 

[Zestilio]

No different to most threads, as in, complete waste of time!

Short term traders still lose, as it all depends on what they know, when they trade, and how much money they have.

The point some of us are making, is, the cycle appears to be nearing completion to the upside - US elections might drag it out a bit more?

Only time will tell!

J_S

We shall see. Though to be honest this cicle has been around for so long that I get a bit sceptical when hearing another vow that it's about to end.