where is the market headed?, page-62

If as they suggest this is the best rally off a low since 1932 then it can be suggestive of an important bottom.

All the same, just as many are getting a little optimistic, it almost seems mandatory that we get a day or two of severe correction to place some doubts in those tentative bulls perhaps.

The alternative is to drive things a bit higher till the fear of being left behind is so overwhelming that those who sold near the lows have to reenter just in time to suffer again.

The market is a cruel beast.

Andrew

So many possibilities here.

Is it ABC down and X up and then another ABC down or is it 5 waves down and then rally or is it over? I don't know.

I can only find one bull market starting around year 8 or 9 in the US in the last 100 years or so.

Year 8 into 9 is usually last gasp rally and because of the recent huge decline, the norm would be a 50% rally into year 9 or at best another near top into year 10 or 11 and then another bear.

I have this cynical feeling that things will improve and there will be much self congratulation about how being preemptive in a major way has shown that the economy can be directed by smart politicians and economists, just in time for a larger collapse to appear.

When markets start falling again later, there will be cries of "stupid sellers, they just don't understand that we have fixed the system, and this is no depression".

I do wonder about margin and gearing in futures markets.

The unwinding in derivatives by funds and in banking will obviously subdue markets, and if futures too are restricted or margins increased then volatility will decrease but so will participation.

I believe Prechter years ago suggested futures markets could even be closed or restricted to hedgers only.

We might have to play a lot more golf.