One of my regular readers responded to my “Bottom?” post on Friday suggesting that, “[He] doesn’t think that we need to jump up at every spike.” Of course, he’s right, the bottom may be far away, and one should always look at the long term, not seeking inflection points. More important, I appreciate the link he sent to this graph:
This graph helps illustrate the absurdity of my post Friday. As you can see, the line to the bottom and out again certainly isn’t straight.
Joe
The problem with charts like this, of course, is that one has to select what to chart. Which, naturally enough, introduces a bit of bias into what one sees on the finished chart. It’s entirely possible this will turn out to be a short ‘Bad’ Bear Market.
Yes, one needs to be careful, in either case. The message I got from looking at these graphs is that it’s easy to believe a short term upturn is “the end”. Eventually, it will be, but there are many times in the past that it wasn’t.