Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Boris Johnson Hits Coronavirus Panic Button Again, UK Accelertoing Covid-19 Second Wave - 25th Sep 20
Precious Metals Trading Range Doing It’s Job to Confound Bulls and Bears Alike - 25th Sep 20
Gold and Silver Are Still Locked and Loaded… Don't be Out of Ammo - 25th Sep 20
Throwing the golden baby out with the covid bath water - Gold Wins - 25th Sep 20
A Look at the Perilous Psychology of Financial Market Bubbles - 25th Sep 20
Corona Strikes Back In Europe. Will It Boost Gold? - 25th Sep 20
How to Boost the Value of Your Home - 25th Sep 20
Key Time For Stock Markets: Bears Step Up or V-Shaped Bounce - 24th Sep 20
Five ways to recover the day after a good workout - 24th Sep 20
Global Stock Markets Break Hard To The Downside – Watch Support Levels - 23rd Sep 20
Beware of These Faulty “Inflation Protected” Investments - 23rd Sep 20
What’s Behind Dollar USDX Breakout? - 23rd Sep 20
Still More Room To Stock Market Downside In The Coming Weeks - 23rd Sep 20
Platinum And Palladium Set To Surge As Gold Breaks Higher - 23rd Sep 20
Key Gold Ratios to Other Markets - 23rd Sep 20
Watch Before Upgrading / Buying RTX 3000, RDNA2 - CPU vs GPU Bottlenecks - 23rd Sep 20
Online Elliott Wave Markets Trading Course Worth $129 for FREE! - 22nd Sep 20
Gold Price Overboughtness Risk - 22nd Sep 20
Central Banking Cartel Promises ZIRP Until at Least 2023 - 22nd Sep 20
Stock Market Correction Approaching Initial Objective - 22nd Sep 20
Silver Bulls Will Be Handsomely Rewarded - 21st Sep 20
Fed Will Not Hike Rates For Years. Gold Should Like It - 21st Sep 20
US Financial Market Forecasts and Elliott Wave Analysis Resources - 21st Sep 20
How to Avoid Currency Exchange Risk during COVID - 21st Sep 20
Crude Oil – A Slight Move Higher Has Not Reversed The Bearish Trend - 20th Sep 20
Do This Instead Of Trying To Find The “Next Amazon” - 20th Sep 20
5 Significant Benefits of the MT4 Trading Platform for Forex Traders - 20th Sep 20
A Warning of Economic Collapse - 20th Sep 20
The Connection Between Stocks and the Economy is not What Most Investors Think - 19th Sep 20
A Virus So Deadly, The Government Has to Test You to See If You Have It - 19th Sep 20
Will Lagarde and Mnuchin Push Gold Higher? - 19th Sep 20
RTX 3080 Mania, Ebay Scalpers Crazy Prices £62,000 Trollers Insane Bids for a £649 GPU! - 19th Sep 20
A Greater Economic Depression For The 21st Century - 19th Sep 20
The United Floor in Stocks - 19th Sep 20
Mobile Gaming Market Trends And The Expected Future Developments - 19th Sep 20
The S&P 500 appears ready to correct, and that is a good thing - 18th Sep 20
It’s Go Time for Gold Price! Next Stop $2,250 - 18th Sep 20
Forget AMD RDNA2 and Buy Nvidia RTX 3080 FE GPU's NOW Before Price - 18th Sep 20
Best Back to School / University Black Face Masks Quick and Easy from Amazon - 18th Sep 20
3 Types of Loans to Buy an Existing Business - 18th Sep 20
How to tell Budgie Gender, Male or Female Sex for Young and Mature Parakeets - 18th Sep 20
Fasten Your Seatbelts Stock Market Make Or Break – Big Trends Ahead - 17th Sep 20
Peak Financialism And Post-Capitalist Economics - 17th Sep 20
Challenges of Working from Home - 17th Sep 20
Sheffield Heading for Coronavirus Lockdown as Covid Deaths Pass 432 - 17th Sep 20
What Does this Valuable Gold Miners Indicator Say Now? - 16th Sep 20
President Trump and Crimes Against Humanity - 16th Sep 20
Slow Economic Recovery from CoronaVirus Unlikely to Impede Strong Demand for Metals - 16th Sep 20
Why the Knives Are Out for Trump’s Fed Critic Judy Shelton - 16th Sep 20
Operation Moonshot: Get Ready for Millions of New COVAIDS Positives in the UK! - 16th Sep 20
Stock Market Approaching Correction Objective - 15th Sep 20
Look at This Big Reminder of Dot.com Stock Market Mania - 15th Sep 20
Three Key Principles for Successful Disruption Investors - 15th Sep 20
Billionaire Hedge Fund Manager Warns of 10% Inflation - 15th Sep 20
Gold Price Reaches $2,000 Amid Dollar Depreciation - 15th Sep 20
GLD, IAU Big Gold ETF Buying MIA - 14th Sep 20
Why Bill Gates Is Betting Millions on Synthetic Biology - 14th Sep 20
Stock Market SPY Expectations For The Rest Of September - 14th Sep 20
Gold Price Gann Angle Update - 14th Sep 20
Stock Market Recovery from the Sharp Correction Goes On - 14th Sep 20
Is this the End of Capitalism? - 13th Sep 20
The Silver Big Prize - 13th Sep 20
U.S. Shares Plunged. Is Gold Next? - 13th Sep 20
Why Are 7,500 Oil Barrels Floating on this London Lake? - 13th Sep 20
Sheffield 432 Covid-19 Deaths, Last City Centre Shop Before Next Lockdown - 13th Sep 20
Biden or Trump Will Keep The Money Spigots Open - 13th Sep 20
Gold And Silver Up, Down, Sideways, Up - 13th Sep 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

The Stocks Bear Market Intermission

Stock-Markets / Stocks Bear Market Dec 13, 2008 - 02:49 PM GMT

By: Tim_Wood

Stock-Markets Best Financial Markets Analysis ArticleMajor stock averages have retested their 2002 lows, oil hits the 40 dollar mark and the dollar weakens. Does this now mean that it’s over? Has the bear market run its course? Is a new bull market on the horizon? Will oil go back to 140? Will the new administration fix everything? Will 2009 bring in more of the glory days?


I want to begin addressing these questions by stating that the primary bearish trend change that occurred in accordance with Dow theory on November 21, 2007 still remains very much intact. Now, this is not to say that there won’t be rallies because there will be. In fact, I want to remind everyone about the rally out of the January lows into the May highs. I distinctly remember hearing the talking heads telling everyone then that the bottom was in. In fact, I even saw articles written around this time proclaiming that the Dow theory was actually bullish. But, sure enough there was another shoe to drop as the orthodox principles of Dow theory remained clearly bearish.

Then, as the averages moved up out of their July lows I again remember hearing all the reasons that the bottom had finally been made. But, that then lead to the brutal decline into the October bottom and it was at this point that the $700 billion bailout took place to “fix” the worst financial crisis since the 1930’s. However, there was still a November surprise in store for the unsuspecting masses as the decline into the November cyclical lows unfolded pretty much right on target. This now leaves us at the fourth “bottom” since January and I’m again hearing all the reasons that THE bottom is now in.

Well, I won’t argue the fact that we have A bottom in place. In fact, my cycles work allowed me to anticipate the timing of this bottom ahead of time, and anyone receiving my analysis was well aware of what was occurring and why. However, just as none the previous “bottoms” since January were THE bottom, I see no evidence at this time to say that the November bottom has marked THE bottom or that the bear market is now over.

Rather, the now one-year old primary bearish trend that was first established on November 21, 2007 still remains intact and as a result, the Dow theory is still forecasting stormy economic conditions. Here’s why. According to Dow theory, once the primary trend is established it is considered to still be in force until something happens to invalidate that trend. To date, nothing of the kind has occurred and I believe, based upon the data at hand today, that there will be continued liquidation in the future as the deflationary forces of K-wave winter continue to bear down.

In the chart below I have included the Industrials and the Transports. As measured from the November 21, 2007 confirmation of the primary bearish trend the Industrials fell by an additional 41% into their recent November 20, 2008 low at 7,552.29. From the divergent October 2007 top, which is where the Dow theory first began to warn of trouble, the Industrials fell by some 46.6%. As for the Transports, they too fell by some 46% from their unconfirmed June 2008 top into their recent November low at 2,945.53. The key now is how long this rally lasts and whether or not anything occurs to invalidate the primary bearish trend. This obviously is an ongoing concern that will have to be evaluated as we move forward, but again, my expectation is that this advance will turn out to be a counter-trend move. The key in monitoring this rally will be the behavior of the intermediate-term Cycle Turn Indicator. As for the new administration being able to “fix” the market, …..please.

Don’t fall for the propaganda and don’t think that one party has more ability to control the market than another. This just is not the case and I want to remind everyone that it is the policy maker’s constant interference with the natural forces of the market that has made matters this bad in the first place. What I mean is, had the market been allowed to take its natural course in the wake of the 2000 top, then based upon the normal bull and bear market relationships of the past, we would now be coming out of this mess. Please refer to my last posting here for these details. Anyway, I don’t think the bear market is over or that a new bull market has begun and I can virtually assure you that the new administration cannot “fix” the mess we are in. 2009 will not be a return of the glory days and oil is not going back to 140 a barrel at this time. This is a massive/global bear market that has been brought on by credit and excesses of the past. The bottom line is, we are now dealing with K-wave winter and I want to again remind you of the signs that occur in this season.

• “Global Stock Markets Enter Extended Bear Markets”

Given the performance of the Chinese, US, and other stock averages around the world there should be little doubt about this one.

• “Trends During Winter: Stocks Down, Bonds Up, Commodities Down”

I would say that this is occurring.

• “Interest Rates Spike In Early Winter Then Decline Throughout”

In June 2004 the Discount rate was at 2.00%. By June 2006 it was at 6.25% and since August 2007 the Fed has been forced to cut the Discount rate back to 2.25%. So, this too, seems to fit.

• “Economic Growth Slow or Negative During Much of Winter”

I doubt that many will argue that growth is now slow and in many cases negative.

• “Commercial and Residential Real Estate Prices Fall”

This obviously began back in 2006 and is still in a major slump.

• “Bankruptcies Accelerate and High Debt Eliminated by Bankruptcy”

This has obviously begun and is no doubt related to the housing and credit bubbles.

• “Social Upheaval and Society Becomes Negative”

We are only just beginning to see this.

• “Banking System Shaken and New One Introduced”

The banking system is now only beginning to be shaken. There should be much more to come.

• “Free Market System Blamed and Socialist Solutions Offered”

This has not yet happened, but just wait.

• “National Fascist Political Tendencies”

More to come.

• “Debt Level Very Low After Defaults and Bankruptcy”

This has not happened.

• “Trade Conflict Worsen”

This basically has not happened.

• “View of the Future at a Low Ebb”

This has not happened as everyone seems to be looking for the bottom.

• “New Work Ethics Develop Since Jobs are Scarce”

If I can assure you of one thing it is that this has not happened.

• “Greed is Purged from the System”

I can absolutely assure you that this has not happened yet.

• “Real Estate Prices Find Bottom”

This has not happened.

“There is a Clean Economic Slate to Build On”

Not happened yet.

• “Investors are Very Conservative and Risk Averse”

Again, this has absolutely not occurred.

• “Interest Rates and Prices Bottom”

Not happened.

• “A New Economy Begins to Emerge”

Has not happened

• “Stock Markets Reach Bottom and Begin New Bull Markets”

Again, we aren’t there yet and I view any relief rallies from these oversold levels merely as intermission.

I have begun doing free Friday market commentary that is available at www.cyclesman.info/Articles.htm so please begin joining me there. Should you be interested in more in depth analysis that provides intermediate-term turn points utilizing the Cycle Turn Indicator, which has done a fabulous job, on stock market, the dollar, bonds, gold, silver, oil, gasoline, and more, those details are available in the monthly research letter and short-term updates. We have called every turn in commodities, the dollar and the stock market. I have covering the details as to what's next with the stock market, the dollar and commodities with the latest in the October research letter and the short-term updates. Don't be fooled by the hype. A subscription includes access to the monthly issues of Cycles News & Views covering the Dow theory, and very detailed statistical based analysis plus updates 3 times a week. Also see www.cyclesman.info/testimonials.htm

By Tim Wood
Cyclesman.com

© 2008 Cycles News & Views; All Rights Reserved
Tim Wood specialises in Dow Theory and Cycles Analysis - Should you be interested in analysis that provides intermediate-term turn points utilizing the Cycle Turn Indicator as well as coverage on the Dow theory, other price quantification methods and all the statistical data surrounding the 4-year cycle, then please visit www.cyclesman.com for more details. A subscription includes access to the monthly issues of Cycles News & Views covering the stock market, the dollar, bonds and gold. I also cover other areas of interest at important turn points such as gasoline, oil, silver, the XAU and recently I have even covered corn. I also provide updates 3 times a week plus additional weekend updates on the Cycle Turn Indicator on most all areas of concern. I also give specific expectations for turn points of the short, intermediate and longer-term cycles based on historical quantification.

Tim Wood Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules