Wednesday’s avalanche was pure pleasure for those of us who have been waiting for reality to assert itself in the helium-rich precincts of Wall Street. Bloomberg news was there to calm the troops with this measured headline: Traders Say Bad Day Was Overdue in Stocks, Not a Reason to Panic. No arguing with the word ‘overdue,’ but it leaves unresolved the question of how much more selling will be needed to balance accounts. Because the rise in interest rates was the proximate cause of the selloff, and because yields look likely, at least in my technical estimation, to rise even more, we shouldn’t be too hasty to fish for a bottom. There are good arguments to be made that a scary correction would set the scene for a Dow blowoff above 30,000. For now, though, we’ll allow for the possibility that the selloff will mark the end of a bull market that had just entered its 116th month.
An Overdue Correction — or the Growl of Papa Bear?
- October 11, 2018, 9:53 am
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October 11, 2018, 6:21 am
The 4% rule kick in yesterday, as the INDU and other major’s move from a 20 and 40 trading high/low 4% in a 5-7 trading day time frame.
These stats state further market decline and a change in trend longer term towards a 1st 10-15% lower price value.
Previous dates were 01/26/2018 and then 07/20/2015 (07/20 was not a complete 20/40 day high).
Market crash cycle ( Bear Market start) in price and time are never from extreme highs, they resonate from the 4% rule to initiate the happening at a lower price target.
To observe in the time frame of the 40-60 trading day lower high from the extreme high as the ‘inflection point’ towards more extreme volatility as a complete price breakdown takes place at the 1st wave low point. This price break will be at the start of the stats high to low point 1st wave coming in now in the days and weeks ahead.
Degree of Market Character stat:
1) The degree and character of the following market decline towards the 1929,1937,1940 and 1987, had the market stat rule in the first 5-7 days in the range of 5-7%, which suggested a 50% to 70% bear market decline.
2) The stat towards a 4% suggests a bear market ahead in the 35% to 40% range, over a 2 year period.
Today action early morning 7th trading day the INDU and other major’s have a 6.25% reading market decline during the 5-7 trading day period observing the more severe type of market decline over the 2 year period ahead.
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Sling Shot Rule:
INDU daily Slingshot entry into a Bull/Bear Market trigger has taken place, this is when from a 20/40 trading day high/low having price value move 2 times the number of point value in the opposite direction but in the same amount of time. The reverse swing low (because the trend was upward) on 09/26/2018 at 26349 to the high of 10/03/2018 high of 26951 was 602 points. The move from the extreme high in value was 2x the 602 points or 1204 points in the same time from the extreme high of 10/03/2018 or 6 trading days.
All Bull/Bear markets must start from this process in a selective time frame of daily, weekly. and or monthly.
Have a great Rick.
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October 11, 2018, 12:04 am
For any of us Old Timers, who remember when the Dow broke 1000 back in ’72, that signpost up ahead certainly reads the “Twilight Zone.”
Trump is freaking out because the 10 year is around 3%, and will crush the economy!
I remember getting 15% on a 5 year CD, tax-free, thanks to the “Gipper”.
You just had to wait the full 5 years to get that benefit.I watched a documentary today about Jim Morrison of “The Doors” fame. In 1968 he rented a 3 bedroom apartment in W LA for $70 a month!
LOL!
How does hyperinflation occur?
Slowly at first, then all at once!If you want to go back even further, to the 1920s, here is an interesting link to Sears house kits starting at $1100!
http://www.thepeoplehistory.com/20s-homes.html
With Thanksgiving approaching here is a link to a 1909 Thanksgiving menu, which cost 50 cents!
Ah, the Good Old Days!
C’mon baby light my fire : )