One of the most respected ideals in history when it comes to the founding of TA is the Dow Theory itself. According to one of its tenets, there will always be a primary, secondary and a minor trend. Trend lines show at the foregoing, that this is a case of a primary trend within a brief 5-year history of the PCOMP (2010-2014).
Taking into consideration adding another doctrine-volume confirmation, that a perceived bull/bear market must also be supported by an observable volume to further support the 'trendness' of the market. However, early/delayed by a month or so and a not so relevant volume by the initiation of the excess phase (December 2013) , volume spikes still can be observed with these subtle changes (which can never be seen, if an investor always see the market with a myopic eye).
With that in mind and the current 6,901.09 level (7/11/2014). It can be suggested by the fledgling author that there was and still an existing consolidated phase of the market since May 2013 until the present time.
*Disclaimer: 1. The author has yet to finish any writings written about the Charles H. Dow nor any of his WSJ writings and is currently poring over these documents. The author has no intention to bastardize the local bourse and is stating what may or can be applied based on the current findings over the internet and book references. 2. Keep in mind that a primary trend may last > or equal than 1 year or so.
Taking into consideration adding another doctrine-volume confirmation, that a perceived bull/bear market must also be supported by an observable volume to further support the 'trendness' of the market. However, early/delayed by a month or so and a not so relevant volume by the initiation of the excess phase (December 2013) , volume spikes still can be observed with these subtle changes (which can never be seen, if an investor always see the market with a myopic eye).
With that in mind and the current 6,901.09 level (7/11/2014). It can be suggested by the fledgling author that there was and still an existing consolidated phase of the market since May 2013 until the present time.
*Disclaimer: 1. The author has yet to finish any writings written about the Charles H. Dow nor any of his WSJ writings and is currently poring over these documents. The author has no intention to bastardize the local bourse and is stating what may or can be applied based on the current findings over the internet and book references. 2. Keep in mind that a primary trend may last > or equal than 1 year or so.
Keeping an eye with the DJIA itself, the author had made some previous correlation to it via images collected from Bloomberg website a month ago (see previous post on 6/10/2014). This was provided as just a random yet observable guess by the author.
Finding that Montier, 2002 had rather depicted with a study that had shown rather an interesting finding that only when markets fall do they have certain correlation i.e. 52% with a rising relationship of just about 8.6%. With this brief information, the fledgling investor is open to speculate whether this small percentage at latter may be significant.
Concluding with another one of the Dow theory tenets, it was stated that for a booming/imploding market, indexes trend must confirm with each other. This basic sentence brings forth an added self-attribution bias that the fledgling author is looking for. However great the development in comparison with any indexes that had existed with Mr. Dow's time and as compared to what exist and is compared with now.
Current P/E (Bloomberg):
-DJIA: 15.82
-PCOMP: 21.82
Finding that Montier, 2002 had rather depicted with a study that had shown rather an interesting finding that only when markets fall do they have certain correlation i.e. 52% with a rising relationship of just about 8.6%. With this brief information, the fledgling investor is open to speculate whether this small percentage at latter may be significant.
Concluding with another one of the Dow theory tenets, it was stated that for a booming/imploding market, indexes trend must confirm with each other. This basic sentence brings forth an added self-attribution bias that the fledgling author is looking for. However great the development in comparison with any indexes that had existed with Mr. Dow's time and as compared to what exist and is compared with now.
Current P/E (Bloomberg):
-DJIA: 15.82
-PCOMP: 21.82
"The imitations of gold and silver will become inflated
which after the rape are thrown into the fire,
After discovering all is exhausted and dissipated by debt.
All scripts and bonds are wiped out.
-Michel de Nostradamus, The Centuries, 1555
which after the rape are thrown into the fire,
After discovering all is exhausted and dissipated by debt.
All scripts and bonds are wiped out.
-Michel de Nostradamus, The Centuries, 1555
References:
1. Bloomberg.com
2. Investopedia.com
3. Behavioural Finance by James Montier, 2002
4. Charles H. Dow and the Dow Theory by George Bishop, 1960
5. Wikipedia.org
1. Bloomberg.com
2. Investopedia.com
3. Behavioural Finance by James Montier, 2002
4. Charles H. Dow and the Dow Theory by George Bishop, 1960
5. Wikipedia.org