is it friday already..., page-96

i post the article below for some contrarian food for thought.


http://twocents.blogs.com/weblog/

The first paragraph is by a poster at WW, the rest mine with some help from Richard Russell's great Dow Jones book:


Tuesday was reportedly only the 7th day since 1950 with more than 25 stocks up in volume versus every 1 down. The average market gain 3 months later was 9.4%. Each signal day was followed by quite a rally. In the case of 1982's signal, well it ran all the way up into year 2000. The dates are 12/27/50, 1/11/51, 10/23/57, 11/1/78, 8/17/82, 8/20/82, and 9/18/2007.


The 1950 example was the example of 25/1 up/down volume most like now. It came about 18 months after the great stock crash low and commodity low (Kondratieff Wave low) of June 1949, Dow 161. There had been a good rally for a year, but then the market sputtered with the terrible geo-political gloom and doom (USSR, China, Korea) and made a higher low at 228 right after Christmas.


The 1957 example was out of the October crash low of 425. Severe recession. Political gloom and doom. Communists pressing their luck in the US and throughout the world.


The 1978 example was out of October crash low of 790. President Carter abandons the Shah of Iran and gives away the Panama Canal; FED Chairman Miller newly installed (worst ever); dollar and bonds collapsing; gold breaks above 240 not long after.


1982's example was out of the bitter August crash lows of 772. Auto production was the lowest in 35 years, factory capacity utilization 69%, 10.1% unemployment.


In every case of a 25/1 up/down volume day the possibility of a big rally was totally dismissed since the economy, and the world could obviously only get much worse.