Does the Market top out on good news or bad news??

andy · #1 14th June 2005, 12:00 PM

WHEN DO MARKETS TOP OUT ?????

Quote:

The markets have NEVER topped out on BAD news. most of the times they have topped out on GOOD news when the participants are euphoric.just consider the major tops in the last 12 years:

1. the harshad mehta top of 4500+ in : APRIL 1992, happened on the day
markets opened after a summer break (yes the markets used to be closed for
holidays in april , october and december then , can u believe it ???!!!).the
scam came out a week later !!!.

2. the next big top of 4600 + in : SEPTEMBER 1994, happened at the start of the one month no delivery period ( this used to be a time of rampant
speculation as one could keep positions open for a month !!!!)

3. the significant top of 1996 of 4100+, happened in : JUNE, which again
was the no -delivery period !!!!. chidambaram's bad budget came later !!!

4. the top of 1997of 4600+, also happened during no-delivery period
(JULY-AUGUST)

the asian crisis happened a couple of months later !!!

5. the top in 1998, happened in the first week of : APRIL, when there was
relatively no harassment from madam jayalalitha(she was potent mkt moving
force those days).
the atomic blasts happened on may 17!!!.

6. the top in 2000, happened in : FEBRUARY, at around 6200, when there
were no negative events. the dow and nasdaq crashed only around march third week.

7. the top in 2001, happened in : JANUARY, when there was still no whiff of
the kp scandal which broke out only in march 2 week.

8. the top in 2004, happened in : JANUARY, when the govt had announced
major concessions on the excise front, vajpayee had returned triumphantly
from pakistan, infosys had reported record results and truly india was
shining!!!

I have detailed out the major tops above. i have also examined the
intermediate tops over these many years and again, i have observed that no
negative event initiates an intermediate down trend.

This info was forwarded to me by mail and thought I would share it members here.

Traderji · #2 14th June 2005, 12:38 PM

Interesting post!!!

Those of you who may be liquidating your postions now considering the markets are at a major top can hold your horses. The consenses of the majority is still bearish and we have more upside before a correction.

billauday · #3 14th June 2005, 05:38 PM

your obsolutely right traderji, following the trend is better than guessing where the market is going .

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