Beruflich Dokumente
Kultur Dokumente
4/1/08
written many many times re the 200 day MA trend as the indicator as to whether a stock
is in its Primary BULL or BEAR trend...
it is simply a reflection of what is happening to the FUNDAMENTALS of the stock,
Firstly...
1/there is a simple break of the previous UPTREND LINE [ UT] [ which itself , connects
the bull cycle of a series of higher lows]
2/ then a DEATH CROSS, where the shorter MA closes below the 200 day...
3/ usually [not always] followed by a rally back towards the 200 day....
4/ then we should see a series of lower lows and lower highs , beneath a falling 200 day.
EX S&P back in '98 to '01
1/ break of UPTREND
2/ Death Cross
3/ the rally back to the 200 day that failed...[ green circle]
4/ followed by a series of lower highs and lower lows...
winding forward , we get to see what happened subsequently.....
a series of lower lows and lower highs beneath a falling 200 day...
due to a DE-RATING....
all this is a prelude to looking at some US sectors[ and Asian co's later ] to see whether
they are in a Primary Bull or Bear trend...
as the Consumer drives the bulk of the real economy , lets have a look at some of the
consumer related indices...
1/ PROPERTY...
new lows....
6/ Investment banks.....
still above the support line at 190....but 200 day already falling.....
apart from the clever traders , trying to time the occasional rallies, which certainly do
occur from time to time, even within primary Bear cycles, medium term investors should
probably just stay away from co's that appear to be in their primary bear cycle...
a series of lower highs and lower lows below a falling 200 day MA...
as Asia is her Primary Bull trend, one shouldn't expect too many co's to be in their
Primary Bear Cycle...
the obvious difficulty/problem is
1/ share prices do ALWAYS come back to their 200 day , even in a Primary BULL
CYCLE, and often can fall below it, thus triggering worries over whether it is in its start
of its bear cycle , just when one should be buying the shares, as they were merely
correcting a previous overbought situation...
2/ how useful is the indicator , as once the Bear cycle appears to be a fact , many months
and a lot of price erosion would already have occured...?
BUT....
as we have seen in the above examples, the Bear Cycle can last for many many more
months and stocks can still fall an awfully long way , even after the Death Cross...
the co's that are clearly already in their Primary Bear Cycle, which are to be avoided or
shorted....esp on any delicious bounce...
CAPITALAND...
but close to v important support level , from which bounces could occur...
NOL …
Venture
ASIA.....
i.e a series of higher highs and higher lows above its rising 200 day MA...
and so far is still in the midst of a typical correction phase , that hasn't even got it back to
its 200 day...
which means, that if the US financial system doesn't implode and if the US consumer can
still muddle along , Asia will once again rebound....