Comments on: Is This Bear Market Rally Over? http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html Freshly squeezed market commentary & analysis Sun, 21 Mar 2010 20:54:19 +0000 http://wordpress.org/?v=2.0.2 by: Babak http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39661 Thu, 21 May 2009 03:59:41 +0000 http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39661 Douglas, I mentioned Hussman's studies re the pattern of volume in <a href="http://www.tradersnarrative.com/comparing-bear-market-rallies-then-and-now-2521.html" rel="nofollow">bear market rallies</a>. Take a look. But also, there's a cyclical nature to volume - we're are now entering the slow summer months. Jim, you say tomato, I say tomAto :-) Russ, valid point. I'm showing a back of the envelop sketch to convey the idea not to demonstrate a quantified edge. Having said that, I'm sure you can massage an N to give you the right signal. I prefer to eyeball it. Fallond uses a moving average cross-over (see his <a href="http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID446477" rel="nofollow">stockcharts public charts</a>). Douglas, I mentioned Hussman’s studies re the pattern of volume in bear market rallies. Take a look. But also, there’s a cyclical nature to volume - we’re are now entering the slow summer months.

Jim, you say tomato, I say tomAto :-)

Russ, valid point. I’m showing a back of the envelop sketch to convey the idea not to demonstrate a quantified edge. Having said that, I’m sure you can massage an N to give you the right signal. I prefer to eyeball it. Fallond uses a moving average cross-over (see his stockcharts public charts).

]]> by: Russ Abbott http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39645 Thu, 21 May 2009 00:51:40 +0000 http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39645 I'm always suspicious of graphs with up and down arrows that are drawn after the fact. What is the signal that tells you to draw the arrow other than the fact that the graph changed direction? But by the time you know the graph changed direction it is often too late. One standard way of creating signals is to look at crossovers of the graph with its N-bar moving average. Is there an N-bar moving average of the BPI that gives reasonably reliable signals? I’m always suspicious of graphs with up and down arrows that are drawn after the fact. What is the signal that tells you to draw the arrow other than the fact that the graph changed direction? But by the time you know the graph changed direction it is often too late.

One standard way of creating signals is to look at crossovers of the graph with its N-bar moving average. Is there an N-bar moving average of the BPI that gives reasonably reliable signals?

]]> by: Jim http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39630 Wed, 20 May 2009 16:03:01 +0000 http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39630 Babak, March 2003 was not the start of a new bull market, October 2002 was. Shorting the BPCOMPQ spike in December 2002 was still plenty profitable for traders, even though it was the start of a long-lasting bull. I'm just not seeing that many parallels between March 2003 and March 2009, other than the wedge price pattern, so my current bet is that the pattern ends differently. I can stop out without too much damage if my roadmap is wrong and the market keeps following the 2003 pattern. Babak,

March 2003 was not the start of a new bull market, October 2002 was. Shorting the BPCOMPQ spike in December 2002 was still plenty profitable for traders, even though it was the start of a long-lasting bull.

I’m just not seeing that many parallels between March 2003 and March 2009, other than the wedge price pattern, so my current bet is that the pattern ends differently. I can stop out without too much damage if my roadmap is wrong and the market keeps following the 2003 pattern.

]]> by: Douglas http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39623 Wed, 20 May 2009 09:50:37 +0000 http://www.tradersnarrative.com/is-this-bear-market-rally-over-2565.html#comment-39623 Volume on the S&#38;P 500 is not co-operating with the idea of a new bull market. What about on the Nasdaq? What story is volume telling there? Volume on the S&P 500 is not co-operating with the idea of a new bull market. What about on the Nasdaq? What story is volume telling there?

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