Walter Deemer: cyclical bull, secular bear market?

Monday, February 23, 2004 | 06:36 AM


barrons_logo.gif

Technician Walter Deemer is the focus of a terrific interview in Barron's this week. Deemer hits the nail on the head in his explanations as to why this is such a challenging environment. (I'll post a few other excerpts later this week).

Here's Deemer's explanation of the cyclical bull, secular bear market:

"The easy part of the cyclical bull market that began either in October 2002 or March 2003, when the market tested the October lows, is just about over, and life gets tougher from here on in. It doesn't mean the bull market is over.

People in 2002 and early 2003 were jumping all over the concept that this was a secular bear market. Defined by me, at least, a secular bear market is one in which a major low is lower than a prior low and a major high is lower than the prior high. In other words a lower low and a lower high. Quite obviously, we are getting that in the Nasdaq because in round numbers it topped out at 5000, went down to 1100, which was lower than the 1998 low, and most people probably would agree it is not going to get back to 5000, and that's the prior high. The Nasdaq is in a secular bear market. But mid-caps and small-caps just made all-time highs, and by definition new all-time highs are not made in secular bear markets.

The S&P is betwixt and between. The Dow Jones Industrials is a little less betwixt and between, because it is more a mirror of the real world and so it is closer to its old high. I've been calling this a secular non-bull market. It is going to be tough for the S&P to get above its 2000 high. So by definition it can't be a bull market. But the secular-bear-market argument means the S&P has to go down and break the 2002 low, and that is anything but a foregone conclusion. To call this a secular bear market may be a little bit too harsh. When somebody says 'secular bear market,' it kind of implies you don't want to be in any stocks anywhere for any reason. The market that we have been in and the market that I believe we are likely to be in for the next 10 years is going to have places that will do well and places that will not do well."

Great take on the complexities of these trifurcated markets: The Nasdaq is rallying within the framework of a broader entrenched bear market, while the Dow is only 12% below its highs. At the same time, small caps are at all time highs.


Source:
Trend Spotter: An Interview With Walter Deemer
Nasdaq, which has been pacing the current bull run, is poised to tumble, says technician
SANDRA WARD
Barron's, MONDAY, FEBRUARY 23, 2004 
http://online.wsj.com/barrons/article/0,,SB107732303981035500,00.html

Monday, February 23, 2004 | 06:36 AM | Permalink | Comments (2) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
http://www.typepad.com/services/trackback/6a00d8341c52a953ef00d834653bb269e2

Listed below are links to weblogs that reference Walter Deemer: cyclical bull, secular bear market?:

Comments

I suggest you read the essay "The Negative Outcome of Economics" it is a rather old Amex Competition entry, but is becoming more valid. Google Search didnt seem to find it in Indycymru so here is the URL: http://www.indycymru.org.uk/modules.php?op=modload&name=News&file=article&sid=393

You could reasses the old marked adage "Buy when shares are held in big lots, sell when they are held in small lots"

Posted by: Ilyan | Aug 16, 2004 7:39:48 AM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner