Secular bear markets do not assume that the economy stops growing through the whole period. As a matter of fact, during the secular bear of 1966 to 1982, the economy's average rate of GDP growth was greater than during the following secular bull market from 1982 to 2000. Sure, spurt of growth are accompanied by cyclical bull markets within the secular bear market. The economic outlook, while important, was partially responsible for calling for a bottom in October for this year (to be equal or so to the bottom in June/July which did not materialize). The reason that the March bottom (and the recent through at 1640) were not called as major bottoms, but called for just mild rallies was the absence of selling exhaustion. The current "red flag" (but no call yet for the hills) is due probably to the slow appearance of buying exhaustion (the peak in DMI+ occurred some 120 Naz point below here, in early June, where the turnips' last false bear call occurred (May 30th to be exact), together with peaks in the BP's of the NDX and the SPX.). As I have said many times, I don't know of any system that can call every single turn correctly, but I report what my indicators show, and they are showing extreme danger. I plan the play and play the plan. The plan calls for extreme caution in face the mounting chorus of bulls.
