TAILIEUCHUNG - Secrets for profiting in bull and bear markets Chapter 8

Chapter 8 Using the best long-term indicators to spot bull an bear markets. Wouldn't it be great to have bought aggressively in January 1975, March 1978 and August 1982 | CHAPTER 8 USING THE BEST LONG-TERM INDICATORS TO SPOT BULL AND BEAR MARKETS Wouldn t it be great to have bought aggressively in January 1975 March 1978 and August 1982 Each of those junctures occurred right before major bull markets were about to get underway. And it would have been even nicer to have moved to a very defensive position in January 1973 late 1976 July 1981 and early October 1987 before major bear markets took their toll. The Professional Tape Reader did and you can too In July of 1982 many economists were writing about a severe recession that would last for another year or more. With the Dow Jones Industrial Average DJI below 800 a widely followed market guru was predicting a crash to at least 500 and the public was listening and believing. After having been bearish for the prior twelve months I wrote in the July 22 1982 issue of PTR We are in the embryonic stages of a new bull market. And for the first time since we turned bearish at the June 1981 top we now want you to use all dips for buying. Three weeks later the market touched its intraday low at 770 and the rest was history. One of the greatest bull markets in this century was launched. At the other extreme the public was absolutely euphoric in August of 1987. One leading financial magazine even wrote an article with the overly optimistic title Dow 3000 Not If But When. The super bulls were tripping all over themselves to come up with higher and higher market projections Dow 3 500 was considered a sure thing and 4 000 was seen as reasonable because our 268 Using the Best Long-Term Indicators to Spot Bull and Bear Markets 269 prices were so much cheaper than those of the Japanese market. In this wildly bullish environment I sounded like a real party pooper when I wrote in the September 17 1987 issue of PTR just days after the all-time high of 2 746 that there are some ominous clouds forming on the horizon. In the following weeks my technical indicators became more and more negative and I had .

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