Saturday, November 15, 2008
Stock Market Comments for November 15, 2008
Its been two weeks since my last post. The markets have continued to churn more or less sideways for the last two weeks. Corrective waves can take a long time to finish.
SP500 and Nasdaq have made new lows in November but not by a lot. DJIA and DJTA have yet to do this. The Canadian TSX has not made new lows yet but it may be close. RIM, one of the big index influences has already done so.
The index volumes continue to remain relatively low or are still decreasing. Continued evidence that this sideways period is only a pause in a continued decent. The fast paced upward and downward moves is continued evidence of a system that continues to be unstable.
Deep Bear Markets (say negative 40 %? or more) often take in the order of 2 - 3 years to bottom so this is all within normal historical experience.
I continue to see some evidence that this Bear Market actually started in 2000 and this is just a continuation. I have stumbled across a number of stocks have already gone below their 2002 lows and some that are approaching that price level. The 2002 to 2008 Bull may have been just a large upward move within a much longer duration Bear (correction). The mainstream media has yet to see this happening.
An interesting stock is Fedex. It has a well defined almost text book set of 5 waves. It now appears to be correcting the Bull market it experienced over the last 30 years or more. It is now into what Elliott called the next higher cycle, a second wave. And, second waves, in the extreme, have the potential to retrace almost all of the first wave. A third wave, one that will go above the 2008 peak, will only occur if Fedex survives the Bear. Some stocks/companies don't.