The Great Depression

  • Benjamin Roth: The Great Depression: A Diary

    Benjamin Roth: The Great Depression: A Diary
    It's all here, times change people don't -the endless govt programs that fail to stimulate the private sector -the ups and downs of the economy, the veterans pension stimulates just as the housing credit did, until of course the money runs out -Roth is a attorney in Youngstown Ohio who kept a diary regarding the economy from 1930 until WW II breaks out, he is objective, candid, and forthright which is more than we get from Washington DC now or then highly recommended

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October 12, 2011

Comments

Valentin Tristan Jr.

A picture is worth a thousand words!!!!
That is a very good chart and it definitely defines the bear market that we are in or is coming. Very definitely the markets are in a down trend.
I went back to July 2010 where the NSYI was at the low end of the trend line and the DOW was at 9686, then I check the high end of the trend line for that rally in Nov. 8,2010 and the DOW was at 11406. The difference is 1720 points. Now the new bottom of the trend line, Sept. 06 2011 an the DOW was at 11139 now to reach the top of the trend line i would think the DOW would need to add 1720 points, that would take the DOW to 12859. Now while I used the low point of the NSYI trend line in Sept. 2011 it was not the lowest point for the DOW which was in Oct. 2011. I believe this just showed how oversold the market was. Now the question is do we think the DOW can achieve 12859. I do not believe the DOW can achieve it and therefore it is just a minor rally that has almost run its course.
http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#chart2:symbol=^dji;range=2y;indicator=sma(200,50,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined
In order for the DOW to achieve the top of the trend line, that would take the DOW to new highs for the year which goes against lower highs of a bear market.
http://finance.yahoo.com/echarts?s=%5EDJI+Interactive#chart3:symbol=^dji;range=ytd;indicator=sma(200,50,100)+volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=off;source=undefined

Valentin Tristan Jr.

After doing some more analysis of the NYSI chart, it looks like from the bottom of the trend line to the, it took four months on average. If this holds true this time then we have seen the year’s lows. Four months would take us to January 2012. In hindsight when I said 11.3k was resistance it was pretty low because it was at the 50 day moving average. If you take the low of Oct.3, 2011 of DOW 10655 and you add the 1720 points I mention on the pervious comment. That would bring the DOW at 12375 which would make that point a higher low and continue the stair step down. I believe that DOW 12375 is still too high. I would be looking at DOW 12000 to be the extreme high of this rally. Dow 12000 is at the 200 day moving average on the ytd, 1 year, and the 2 year chart. That will be pretty formable resistance. So in conclusion I would be looking for this rally to turn around at DOW 12000. The only thing is I do not believe the rally will last 4 months. I would be looking for investors to book profits at DOW 12000.
I am always learning.

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