The call for this week: China is closed for the Chinese New Year this week (The year of the Tiger), so China is not going give us a hint as to if our markets are bottoming like it did last year. Still, we are pretty excited since today is session 18 in the envisioned 17- to 25-session “selling stampede” and we are looking for a bottom. Interestingly, so is the astute Lowry’s service. To wit:
“A well-known market analyst was said to have once remarked that every bull market has at least one pullback that fools investors into thinking a new bear market has begun. To create this deception, these pullbacks need to be severe enough to raise expectations a new bear trend is underway – such as might occur with a correction of 10% or more. But, to be deceptive, such declines should be relatively rare occurrences, which runs counter to the general perception. . . . So, rather than being commonplace, pullbacks of these magnitudes are relatively infrequent. . . . How then, are investors to differentiate between these corrections and the beginnings of a new bear market? One similarity in each of these cases of corrections reaching 10% or deeper is that they typically occurred well into the second stage (the Holding and Upgrading Zone) of the bull market. That is, profit-taking has already been well established, as reflected in a sustained uptrend in our Selling Pressure Index, thus setting the stage for deeper than normal corrections. In the present case, however, the Selling Pressure Index was recording an 18-month low in mid-January when the (stock) market correction began. Thus, based on the long history of the Lowry Analysis, the probabilities do not favor a 10% plus correction occurring at this relatively early stage of the uptrend.”
….read the entire report HERE.