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I found this chart trying to explain the market .. what do you think?
Old 04-22-2020, 07:29 PM   #1
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I found this chart trying to explain the market .. what do you think?

So do you agree with this chart? Are we now in the "Return to normal" after the "New Paradigm" and "Denial" and then down
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Old 04-22-2020, 07:52 PM   #2
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Well the question is will the continuous Fed spending make this time truly different?
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Old 04-22-2020, 08:53 PM   #3
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I think it's another reason to have an asset allocation, to rebalance when you're out of whack, and to buy into the market with each paycheck during earning years. As I've learned, any other use for such a chart borders on gambling--- you can usually find a guy with a chart of numbers by the roulette table too.

Of course there are lots of places to find spurious correlations: https://www.tylervigen.com/spurious-correlations
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Old 04-22-2020, 09:50 PM   #4
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We never hit the "New Paradigm" phase this time around.

I'd say somewhere between Greed and Delusion.
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Old 04-22-2020, 10:02 PM   #5
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Oh I thought we definitely hit the new paradigm level looking at CAPE10!
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Old 04-23-2020, 04:59 AM   #6
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I'll tell you in a year or two.
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Old 04-23-2020, 05:54 AM   #7
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Pretty much every stock market cycle follows this pattern over the years. Here is another historical view.

IMG_1837.JPG
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Old 04-23-2020, 09:27 AM   #8
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We are pattern-seeking little mammals. Evolution has made us that way because we cannot evaluate every new situation ab initio. The sabre toothed tigers were too fast for that.

The psychologists tell us that our inclination to find patterns causes us to see patterns in random historical data. That is the essence of technical analysis, which is basically astrology for investors.

The OP chart is one explanation of history. There will be many others with no way to tell which is correct. Useless, IOW.
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Old 04-23-2020, 11:31 AM   #9
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Quote:
Originally Posted by OldShooter View Post
We are pattern-seeking little mammals. Evolution has made us that way because we cannot evaluate every new situation ab initio. The sabre toothed tigers were too fast for that.

The psychologists tell us that our inclination to find patterns causes us to see patterns in random historical data. That is the essence of technical analysis, which is basically astrology for investors.

The OP chart is one explanation of history. There will be many others with no way to tell which is correct. Useless, IOW.


I agree we seek patterns. And I tend to always ignore all the two hundred day moving average, “support”, etc methods.

But I find it fascinating that pretty much in every bear market there is kind of a fake recovery that usually happens multiple times. I don’t know if it is human nature or whatever, but it seems to happen during each bear market at some point.
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Old 04-23-2020, 11:47 AM   #10
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Sounds easy. Avoid the fake recovery.
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Old 04-23-2020, 11:48 AM   #11
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Sounds easy. Avoid the fake recovery.
Yup. If it doesn't go up, don't buy it.
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Old 04-23-2020, 12:11 PM   #12
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Quote:
Originally Posted by BeachOrCity View Post
I agree we seek patterns. And I tend to always ignore all the two hundred day moving average, “support”, etc methods.

But I find it fascinating that pretty much in every bear market there is kind of a fake recovery that usually happens multiple times. I don’t know if it is human nature or whatever, but it seems to happen during each bear market at some point.
It would most likely happen this time, but is competing with the Fed going all out.
The jury is still out.
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