笑料: Bear market may begin Tuesday

davidino

Bear market may begin Tuesday
Commentary: Oct. 9 the anniversary of two major trend changes

By Mark Hulbert, MarketWatch
CHAPEL HILL, N.C. (MarketWatch) — Will the bull market come to an end on Oct. 9?

Don’t laugh. It turns out that two of the most prominent market turning points of the last decade occurred on this very date.

The first was the beginning of the 2002-07 bull market, which occurred Oct. 9, 2002.

The second of those major turning points came as that 2002-2007 bull market was coming to an end. Believe it or not, its exact end was on — you guessed it — Oct. 9, 2007.

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In the ensuing bear market, the Dow and the S&P 500 would each lose more than half their values.

You might think that there are almost impossibly low odds that two trend changes this momentous would occur on the very same day of the year.

But you’d be wrong. In fact, this is a great illustration of how our gut instincts are poor guides to statistical truths.

Take, for starters, something that is far afield from investments but with which many of us are already familiar — the so-called “birthday paradox.”

How many people do you need to have together in a room before there is a greater than 50% probability that two of them have birthdays on the same month and day of the year? The answer, believe it or not, is just 23.

Not dissimilar statistics help us appreciate how it could be that two major changes of trend occurred on Oct. 9.  

Oct. 9 is a historic date for both bulls and bears.

Consider the 69 changes of the stock market’s major trend that have occurred since 1900, according to the precise definitions of bull and bear markets employed by Ned Davis Research, the quantitative research firm.

Given the resolution of the birthday paradox, we should expect several days to be the dates for more than one trend change.

Sure enough, that is exactly what the firm reports. In addition to Oct. 9, other such dates are:

•Jan. 5: The 1949-53 bull market came to an end on this date, as did the 1957-60 bull market.

•Apr. 28. The 1942-46 bull market began on this date, and the 1970-71 bear market ended on it.

•Sep. 21: The 1974-76 bull market came to an end on this date, while the 2001-02 bull market began on it.

All of a sudden, Oct. 9 doesn’t seem to be all that special, does it?

Well, what about the whole month of October. Aren’t there more changes of market trend during this month than in any other?

No. Of the 69 major trend changes since 1900 on the Ned Davis list, 9 took place in October. Though that is higher than the monthly average of 5.75, October's total is neither statistically significant nor unique. There are two other months that also were the occasion for nine trend changes each, and an additional one in which eight trend changes occurred.

The bottom line? Our minds love to find patterns, even when none exists. Be skeptical of any patterns that are urged upon you until and unless they can withstand statistical scrutiny.

Comments:

Bah humbug!!!!!!  There is always lots  of  IF's and MAYBE's in such prediction

However the funny thing is if the guess is correct, we hailed him/her or her as a guru but if he/she is wrong., well they  will  go on and continue guessing till they  get it right..... dont need to be an analyst or trader to know how to, Even a fool can do that.


James Schiess Gold, Silver, Uranium!!!! Do Bears still enjoy Corn & Soy Beans

Oct. 9? Oh, I don't kn.....wait! That's today! OMG run for the hills!

September 21st, the day AAPL launched a new product, was the turning point from bull to bear market according to my charts (DJIA volumn). Ever since, I've been bearish. Time will tell. Good Luck!

My guess is that the DOW will test 8500 before it ever hits 15000.

It is just human nature to see ugly faces of dirty bears showing up.

Shall we send them to H?

Too early to tell, but so far 1% losing day for bulls.

Don't despair. It is just a way of Mega bull market's beginning.

A little pullback, mega push forward.

Note the nice Gold and Silver sale going on...

This looks like a psychology lesson mixed with a bit of a historical twist.  I hate to say it, but I don't think history plays a big part in the markets.  I think it's more dependent on current events and future expectations.

Wheres the head line article on the IMF warning?

just another clown who found something in the slope of the charts when looking back. The art of hindsight, oh please lol!

First, Mark Hulbert's statistics about the number of "birthday People" is correct. Second, we have various events collapsing into one another. The probable re-election of President Obama who has promised to raise taxes (a stock market killer), the earnings reports will be poor for the 3rd quarter making stock valuations suspect, and the fiscal cliff of higher taxes and lower government spending already legislated that literally would take an act of congress to change (calculate the probability of that), will smash the market at some point within the next 3 months.

@William W. Gorman Romney will win.  It's going to be a repeat of Bush-Gore: Obama will win the popular vote but lose the electoral vote.  You can call me Nostradamus on election night.  Or the vote will be so close it will take weeks to resolve.  Either way, Romney will win.  

@Ron Micci @William W. Gorman - And in my opinion this election will be a repeat of the Reagan/Carter election in 1980 - not close. Reagan was portrayed by the Democrats and MSM as a radical, dangerous, gun-happy candidate before the debates. Once people saw that he was not evil incarnate, but someone with new ideas, faith in the country, and genuine interest in solving the nation's problems, more felt comfortable supporting for him. When others saw the support growing, and that he was a socially acceptable candidate, the desire to remove Carter from office quickly swelled the number of Reagan voters, and peaked on election day. Reagan beat Carter by 9.7% in popular vote, and swamped him 489 - 44 in electoral votes.

It will be a bit different this time. There is no third-party candidate like Anderson, who took 6.6% of the vote, almost exclusively at the expense of Carter. Giving these votes to Obama would result in Romney winning 50.7% to 46.6%. The electoral college will be much more evenly divided as well, but at this time I see it as 297 - 241 for Romney.

All of this is, of course, predicated on the assumption that there will be no October surprises on either side. If either candidate does or says something stupid, the economy collapses, or there's a major US international win/failure, then all bets are off. And, of course, all of this is MHO, YMMV.

It's also my birthday, aka "Doomsday".

Is this the best MW can come up with?

At least the hopium stories were a bit more interesting....

Actually this was signal for sell off and it worked.

Oil up against all the odds against it.inspite of a weaker economy, stronger dollar, higher supplies etc etc  manipulators have it on a grip and no political govt or person can do anything about it.

Oil shorts get spooked very easily, as is usually the case with highly leveraged entities. If the minimum margin was 25% for any commodity it would be a far more stable market.

Really stupid article.

What about the times nothing happened on those dates?

Funny, they said the same thing LAST quarter and the quarter before that. If the markets are going to tank, its going to most likely be after the Christmas season when the fiscal cliff nears.

We are living in a 'catch 22' with the stock and bond markets! Individual investors haven't got a chance in the world of high volume computer trades, and don't stand a chance when it come to the highly manipulate games being played by big monied funds and brokerages! Yet, every 'baby boomer' out there, relies on positive returns from stocks and bonds! A perfect example of how the game is played .... a negative campaign was initiated last week against Chipotle ... the stock has declined over 30% .... whether the stock was overvalued or not .... I have to wonder if this was a contrived event, so someone could make a millions/billions off the stock's decline, and since Wall Street police's itself, one really has to wonder how often the SEC looks the other way ....

Does a bear take a dump in the woods at 10:30 AM ?

October E-shoots rallies begin today.

From a hundred year perspective the last big bull run ended around 2000 and is now in a 20 year topping phase that will continue with its current pop's & drop's likely until 2020, then if it follows the same pattern will start the next big 20 year bull run. The 200 year question however is can the markets continue higher forever?

Bernanke's job is on the line.

Bernanke's self-serving money-printing action seems coming soon.

Whatever Hulbert is smoking, I wish he would share some.

befriend

austinjoe

thx

silicon_beaver