BEAR CYCLES LOOK LIKE........4/1/08 written many many times re the 200 da y MA tr end as the indicator as to whether a stockis in its Primary BULL or BEAR trend... it is simply a reflection of what is happening to the FUNDAMENT ALS of the stock, by which i mean , that in BULL CYCLES, EARNINGS will be rising,with surprises on the upside... and a RE-RA TING occurs on top of the earnings upgrades.... and vice-versa on the BEAR tack.... TECHNICALLY , this can be seen by chart patterns that appear in sequence. 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 DEA TH CROSS, where the shorter MA closes below the 200 day ... which is still rising, but better if its already flatter by then... 3/ usually [not always] followed by a rally back towards the 20 0 day.... 4/ then we should see a series of lower lows and lower highs , beneath a falling 200 day.
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9/ JAPANESE banks , been in their BEAR cycle for some time already...
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...
again , defined as...
a series of lower highs and lower lows below a falling 200 day MA...
ASIAN large caps...
as Asia is her Primary Bull trend, one shouldn't expect too many co's to be in their
1/ share prices do ALWAYS come back to their 200 day , even in a Primary BULLCYCLE, 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...
i.e the WHIPSAW...
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