Crash Line. How Long, Oh Lord?
Action and Meaning of the Long-Term Trend Indicator
As It Enters the Realm of Highest Market Risk
8.03 years June 28, 2002--July 9, 2010
Hypothetical--Weekly
THE DEVIL'S IN THE BLUE LINE
When the blue curve dives, the market dies. It is a composite of many cycles, known and unknown. Its import to you and me lies in its levels and speed.
It speaks rarely, spurting the full range from one limit to the other only six times in these past eight years. (No prior component source data exists.)
At the top limit, as you can see by visual inspection, it is safe to buy and hold stocks (and ETFs). It is unsafe to do so at the bottom limit.
The angle and velocity of the spurts are of keen interest. There seems to be an inverse relationship between time expendedin the drop and the time it takes to rebuild new energy for the next launch. The current drop is the fastest on record.
Caveat. Even though there are 417 weekly observations in this sample, six event reptitions are not a lot to hang you hat on. Nevertheless, for those whose major concern is safety-first always, the message at the present reading of 5 is: stay out or short.
Posted
7/11/2010 7:25 p.m. EDT
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