Your pop up blocker may be preventing the MarketSmith tool from opening.
Learn how to resolve this issue.
The NYSE has declined 20%+ so in recent weeks IBD has said that all base counts reset since this meets the definition of a bear market. However in this weeks IBD 50 commentary in Invetor's Business Daily it says that HANS base is a riskier late stage structure. They say that AAPL is also a risky late stage structure. Thiis is confusing to me. If all base counts have reset then why are these bases "late stage structures"?
Tuscon: I'm with you 100%! It would be nice to see this explained b/c it does seem inconsistent. That said, I still look at those 3rd & 4th stage bases as just that and would buy few, if any, of them (AAPL possibly an exception). I guess I don't "feel" like the markets have really reset though I have no fact or rule to prove that. Since only one index barely squeaked by the 20% correction point, it doesn't count ???? Brad
Not an expert myself on base resets, but. Yes an index or two did go down 20%, the definition of a “bear” market… I believe it only met the rule of the “technical” aspect of a bear market, but not the “spirit” of a bear market. And hence, it has not been a “real bear market” yet and so base counts have not been reset. Don
I've wondered the exact same thing and I just came across the best explanation to date. The whole 'base-reset' represents the psychology of "has there been enough of a psychological and emotional WASHOUT that enough people have left the stock for them to start a new rally and for it to be fresh?" The last 4.5 weeks has been a heck of a psychological and emotional washout and damage to a lot of people - there is no doubt! However, we're not in a bear market yet. It needs to continue for months more, decline 20-25% then perhaps the reset of all bases will occur. So I think IBD is using the actual undercut of a prior base for now as the only definate reset mechanism as the overall reset needs more work. Although I've seen the reset applied where the undercut did not undercut the entire base on base structure as my understanding was that it had to? Hope this helps!
Bill O'Neil answers this question very well during an interview with TFNN back in February of 2008 (a very similar market environement). The question comes at the 3:50 mark. Have a listen: http://www.tigeruniversity.com/mp3/AskBillonTFNN021208.mp3
Thnx! Great link to WON interview and very timely topic-wise & market condition-wise. Brad74 & dthomas240:, it sounds like our collective read is no base reset. This is confirmed in the interview. Brad74: if I read your comment correctly, when I see a new base attempt to undercut a prior base-on-base structure, I err to the conservative side and do not count a base reset until the low of the whole base-on-base lowest low is undercut. SBUX is trying to do this this week. Brad
© 2013 MarketSmith, Incorporated. All Rights Reserved. MarketSmith® is a registered trademark of MarketSmith, Incorporated. All data provided by William O'Neil + Co. Incorporated unless otherwise noted.