Stock-Market-Observations

Market Comments August 6 2004

With yesterday’s 165 Dow Industrial decline, the S&P 500 is at 1080 and is marginally failing to hold the 39-week MA (S&P 1088) as noted in last week’s update. This raises the risk that that a new adaptive channel move is taking places beneath the black 39-week MA. The market may yet rally over the next few days bringing the S&P back above 1088 so we need to wait a few more days before leaping to any conclusions.

However the logical downside target if the S&P does moved into the lower region is the green envelope currently at 988. If the downside momentum should start to grow, the ultimate convergence of the S&P and the green adaptive envelope will probably occur at somewhat lower price levels. Terry Laundry

Update August 13 2004

For this week’s Commentary I am summarizing the 39-week Adaptive Channel concept in the first chart and then my most important portfolio management project of recent years in the second plot. Click on the respective images for a larger view.The Adaptive Channel Chart shows a modest decline below the 39-week MA, which usually leads to a complete oversold condition near the lower green envelop. From this perspective the outlook is negative but we will need to monitor the rallies that are likely now that the market is becoming oversold.The second chart illustrates my last 3 years attempt to apply T Theory principles to portfolio management in a new way that allows steady growth with reduced volatility. It is unique to my work because it uses long-range T Theory concepts in combination to achieve a practical result and does not require trading of positions.

The upper plot represents the quarterly 5-year investment result of a small (5) number of investment categories, which I call a blend, selected by general Big T considerations. The lower plot is the S&P 500 Total Return for the last 5 years. The objective, of course, is to generate consistent but steady growth with low volatility from one quarter to the next in an era that to my way of thinking had no growth prospects.

As you may remember my big Dow Industrial Mega-T concept showed that equity growth starting from the 1974/1982 lows had been exhausted in 1998/2000. Looking at the last 200 years of big Ts I concluded that all traditional equity investment concepts probably had no future and thus some radically new T Theory concept need to be “invented”.

An additional serious problem came out of my long term S&P 500 Price to Earning Ratio perspective from the 1800’s. It was clear that the Big T projection of a time peak was coincident with a historic overvaluation peak, which spelled “double trouble”.

As the bear market developed it also seemed the Feds forcing of rates to historic lows was merely causing a new Real Estate bubble to replace the old equity bubble. To me this implied the Fed had no viable long term solution to the equity over-valuation, which likely delayed the day when equities would be able to resume their historical growth pattern.

After much thought of very basic T Theory principles I concluded that simple solutions didn’t exist and I had to create a new approach that could overcome these very long-term negatives. This required a fresh approach and in the weeks ahead I will start reviewing the needed long-term concepts.

In the meantime please don’t post questions, as the specifics are proprietary. You can however talk with Paula Burke my ASIC partner at her toll free number 1-888-228-2995. In later postings we can start working on the Dow Industrials findings for downside long-term objectives, which eventually dictate many of the investments, and choices that are needed to establish the optimum category blend. Terry Laundry

Update Aug 20 2004

The S&P has recaptured the critical 39-week MA (still at S&P 1088 as noted in last week’s update) after falling below this bullish support level. There are many bullish scenarios that can develop if this bounce can hold this 1088 support level in the weeks ahead, but it is too early to say right now.

However if this level can hold future corrections going into late August, then I believe the Short Range Ts will develop a bullish scenario going into year-end and then into 2005.
Terry Laundry

Short Range T Update Aug 27 2004

The Short Range T chart below brings the picture up to date as far as the current T is concerned. Click on the image for a more detailed view.

It is likely the market is firming now in anticipation of a recovery into this T’s projection of a fall price peak. The S&P is about 1% above its 39-week MA and I would expect to see the follow through that this T projects.

The bigger question is what might happen after this T’s peak date. There is a common bullish outcome, which relies on the generation of a new bullish Short Range T, but it is too early to look at the details. Nevertheless I do note the presence of a rising bottoms pattern in the Volume Oscillator and if continued this can have bullish consequences for the next T that will provide the S&P’s year end projections. Terry Laundry

Update Sept 3 2004

The S&P is turning up as expected to the current Short Range Ts projected peak later this Fall and I believe the outlook will remain bullish as long as the S&P can hold above the 39-week MA of 1088-ish.

There are a number of very interesting short term reasons why the market can produce a bullish run for the longer term into 2005 but the better way to confirm this prospect is to watch the market continue to turn up to the fall projected peak as detailed in last weeks chart.

The rally will necessarily be ragged with periods of technical weakness but accumulation should be taking place near the 39 week MA. The major up thrust will have to wait for a new Short Range T but there is plenty of time for this to get underway and produce a strong finish to the current year. Terry Laundry

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Many thanks to Paula Burke for her permission to re-post Terry’s old T Theory® explanations.  The period re-blogged on these pages are some of Terry Laundry’s best work and was published here from public domain.

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I claim no credit for the material found under T Theory® on this blog.  All of this material is the creation of Terry Laundry and was downloaded from Terry’s free blog site (TypePad).  I have created a mirror of Terry’s original material and now there is a second site containing Terry’s T Theory®.  One or both of these websites hopefully will survive through time as Terry’s material is too important to be lost to the ravages of time.  This site is simply a memorial to his lifetime work.

The page content re-blogged here is exactly as Terry created on his original webpages (saved on my computer with ScrapBook)).  Nothing has been left out from the period Dec 2003 to June 2011.  From Terry’s site, I made a lot of formatting changes, creating a more easily readable webpage appearance.  The PDF chart duplicates of the JPEGs have been omitted for ease and speed of recreating Terry’s pages.  References to PDF charts should be ignored (but no chart was left out).

After June 2011, Terry created a paid subscription website. None of that material is found here.

There were many many, many hours spent on this project; downloading Terry’s individual charts & audio files, followed by the uploading of Terry’s charts and audio to my WordPress blog library, after which I had to insert the uploaded material into my new T Theory® webpages (hopefully in the correct places).  This was a dull and arduous project and I hope you enjoy it.  I don’t believe there remains any more of Terry’s material in free domain, so my T Theory® project is probably finished.  If I’ve missed something, you can leave me a comment.

If you find an uploaded reference error (chart or audio in the wrong place), please note the month and year of the webpage, plus the exact name of the referenced error file.  Include any other info that will help me locate the problem file and where it occurs on the webpage.  Leave a comment for me with the info and I’ll fix it.

Terry’s material is very long and will take many weeks for you to finish.  Don’t hurry, it’s not a marathon and you will absorb more if you go through it at a reasonable rate.  This is especially true for those who don’t invest in the T Theory® reference encyclopedia.  The encyclopedia is a written reference for T Theory® and includes everything of importance for Terry’s T Theory®.  Without the reference encyclopedia you must depend on your memory and Terry’s method carries some rules that you could easily violate.  The encyclopedia also includes new information never seen on his website.

You are welcome to save any or all of my blog material to your computer.  You also have my permission to re-blog my information, but you must (1) credit me and my blog in an obvious manner and (2) don’t change my material.

FYI – I find the best way to save a webpage is using “ScrapBook” (it’s an add-on for the FireFox browser).  ScrapBook saves a webpage to your computer EXACTLY as it appears on the day you saved it.  You can’t tell the difference between the internet webpage and your ScrapBook saved webpage.  The saved pages are not pictures.  Instead the pages consist of HTML and page functionality remains identical on your computer.   There is also a second method for using ScrapBook, where you can save all of the webpages down to a defined link depth.  This optional method means all links will function on your computer to the link depth specified (meaning you can click on links on your saved webpages and tunnel down into pages within pages).  Saving the normal way will only save the top webpage but the links that exist could continue to  function by taking you to the website on the internet instead of on your computer.  But sometimes the linked website doesn’t exist anymore.  I’ve had this happen on some very good webpages with unique information (they just disappear into the internet void).  That’s a bummer when you lost some really good info and thus rose my need for ScrapBook.  You can also filter the pages saved using the optional ScrapBook method, which can exclude all pages not coming directly from the specified website (filtering is recommended using this method otherwise you wind up with a LOT of useless stuff).

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