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Are we approaching the threshold of a bull?
Old 05-31-2009, 04:02 AM   #1
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Are we approaching the threshold of a bull?

For the market timers, it may be the dawn of a new cycle, at least from the 200 days Moving Average investment technique standpoint. I just learned about it today in the boggleheads blog and researched the web a little bit, so I'm by no means an expert on this. I have worked some with trend analysis and linear regression, though, and this seems to make statistical sense. Below is the S&P500chart with the 200MA and 50MA lines. The pundits say that when they cross, it may be the first sign that a sustainable rally will ensue. Anyone following this? Are you considering buying more stocks if and when the crossing happens?

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Old 05-31-2009, 07:02 AM   #2
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I don't do technical analysis (kind of like dowsing for water, IMO), but I note that some indicators are saying the party is back on track: commodities, Ted spread, etc. The BDI is now on a tear and looking to keep rising.

Latvian hookers are apparently still signalling problems, though.
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Old 05-31-2009, 08:09 AM   #3
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Jun-Jul 2008 had a similar event, where the 50-day MA looked like it would intersect the 200-day.

Jun 2001 thru Jun 2002 looks like a year of teasing to me. The 50-day almost touches the long decline of the 200-day MA which is on a steady decline.

Google these terms: see patterns where none exist. Not saying this is the case for MA, but you should be skeptical of all financial theories, and stick to your plan.

For me, I see the lower prices as opportunity, and have increased my contributions to stock in order to get my asset allocation back to the plan.
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Old 05-31-2009, 08:19 AM   #4
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When (if) they cross (and if soon) I will probably be rebalancing my portfolio because it would be out of balance with equities too high. S&P around 1000 would probably be enough to cause rebalance. This will mean selling some equities to buy bonds. I already rebalanced the other way (buying equities) back when stocks were way lower.

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Old 05-31-2009, 08:23 AM   #5
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I'm sorry, but with stock indices up 30% to 60% since March 9th, we are way past the starting threshold of a bull market. Sorry if you missed it.

Now if you are writing about the ending threshold of a bull market and the beginning of the next bear market, well then ... nevermind.
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Old 05-31-2009, 09:50 AM   #6
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For the market timers, it may be the dawn of a new cycle, at least from the 200 days Moving Average investment technique standpoint. I just learned about it today in the boggleheads blog and researched the web a little bit, so I'm by no means an expert on this. I have worked some with trend analysis and linear regression, though, and this seems to make statistical sense. Below is the S&P500chart with the 200MA and 50MA lines. The pundits say that when they cross, it may be the first sign that a sustainable rally will ensue. Anyone following this? Are you considering buying more stocks if and when the crossing happens?

Where do you find a chart like that? I have been looking for a while.
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Old 05-31-2009, 10:15 AM   #7
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Where do you find a chart like that? I have been looking for a while.
I follow grains pretty closely, but like Brewer, dont get into the technicals too much. There are probably several charts out there. This is one from yahoo finance.

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Old 05-31-2009, 10:21 AM   #8
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The only thing the OP's chart says to me is that this bull market started close to 3 months ago around March 8. Whether it ends tomorrow, next month, next year, or in 5 years, no one knows.
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Old 05-31-2009, 10:46 AM   #9
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Now if you are writing about the ending threshold of a bull market and the beginning of the next bear market
Don't worry. I'll let everyone know when to get out. Just keep an eye out for another "Whee!!!" thread.
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Old 05-31-2009, 11:03 AM   #10
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I don't do technical analysis (kind of like dowsing for water, IMO), but I note that some indicators are saying the party is back on track: commodities, Ted spread, etc. The BDI is now on a tear and looking to keep rising.

Latvian hookers are apparently still signalling problems, though.
I thought we were supposed to follow beaver cheese futures...

DD
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Old 05-31-2009, 11:48 AM   #11
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I thought we were supposed to follow beaver cheese futures...

DD

Nope. Just invest in them. You know, the Venezuelan exchange is even open on weekends...
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Old 05-31-2009, 11:51 AM   #12
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Don't worry. I'll let everyone know when to get out. Just keep an eye out for another "Whee!!!" thread.
May I trouble you for a PM before you make the public post? Please?

I can use all the advance timing one can get
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Old 05-31-2009, 12:36 PM   #13
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See the link below for the best long term investing timing signal. Follow the 20/50 week SMA on the S&P 500. Keeps you out of the majority of the down market and gets you back in relatively soon after the bottom.

Another thing to keep in mind. Market bottoms are signaled by very low volatility as everyone throws in the towel and is hesitant to bet one way or the other. The volatility in this market, while not nearly as high as it was last fall is still at a historically high level. Have fun holding the bag for the institutional guys on this latest run. Buy and hold investors are a great source of liquidity during bear markets. The strategy like all others, works until it doesn't.

Ticker Classics
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Old 05-31-2009, 02:40 PM   #14
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You don't need charts and moving averages and things crossing things, all that's postulating is that if the market reverses course and stays that way for a few steady months, it'll keep going that way for awhile longer. But the problem with analyzing "charts" is by definition you'll always miss the herd, since you need to wait for the herd to establish its direction before you can mathematically identify its trend.

How about just asserting "if a bunch of people start buying, prices go up and yet they keep buying, then more and more people will pile on and start buying too (and vice-versa)." Which is just well-known market psychology and common sense, isn't it? No charts and numbers and things needed...
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Old 05-31-2009, 02:54 PM   #15
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The only problem with the "technical analysis" (charts and graphs, etc) or the "hunch-based momentum" ("they were buying yesterday, so they'll be buying tomorrow") approach is that they don't work in practice. Aside from that . . .

If they did work, they would immediately stop working.
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Old 05-31-2009, 03:23 PM   #16
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Originally Posted by Radiophilejapan View Post
For the market timers, it may be the dawn of a new cycle, at least from the 200 days Moving Average investment technique standpoint. I just learned about it today in the boggleheads blog
I am not a "chartist", though admittedly a CMT (Clean Market Timer ). I frequent this ER forum for camaraderie, not for stock tips. I have never been to any investment forum, bogleheads included. To me, it appears strange that the disciples of Mr. Bogle would discuss market timing and charts. Can someone explain?
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Old 05-31-2009, 03:57 PM   #17
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To me, it appears strange that the disciples of Mr. Bogle would discuss market timing and charts. Can someone explain?
It's called hedging your bets or, as unclemick calls it, hormones . But ha-hum, I'm a believer... mostly.
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Old 05-31-2009, 04:06 PM   #18
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I am not a "chartist", though admittedly a CMT (Clean Market Timer ). I frequent this ER forum for camaraderie, not for stock tips. I have never been to any investment forum, bogleheads included. To me, it appears strange that the disciples of Mr. Bogle would discuss market timing and charts. Can someone explain?
Discussing cycles and market timing doesn't necessarily mean you've abandoned buy and hold. Each bear market tests the belief you have.

A fact overlooked is that some are accumulating, while others are retired and looking to preserve. DCA-ing while you're 30 is very different than a 70-year old watching the last bear while holding 60% stock fund portfolio.
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Old 05-31-2009, 04:09 PM   #19
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It's called hedging your bets ...
I have heard that in SouthEast Asia, there are some sects that bow to God, Christ, Buddha, Muhammad, and perhaps other divine entities from Hinduism. They want to cover all bases, although these religions' beliefs are somewhat mutually exclusive.
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Old 05-31-2009, 04:12 PM   #20
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Discussing cycles and market timing doesn't necessarily mean you've abandoned buy and hold. Each bear market tests the belief you have.

A fact overlooked is that some are accumulating, while others are retired and looking to preserve. DCA-ing while you're 30 is very different than a 70-year old watching the last bear while holding 60% stock fund portfolio.
Excellent observation.

Regardless of whether you've put $2 on one pony to show or boxed a 12 horse trifecta, it's still very interesting to watch the race.
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