Long Term Stock Charts 40 Years or More by ytk22785

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									                                   The Starboard Side Report
                                                        The week ending 3/06/2009


Weekly Commentary
With the relentless media headlines focusing on doom and gloom, we wanted to try and offer a different perspective this week.
Much of this analysis will be supported with charts, so please make sure to check out the tabs below for additional commentary.
If you have been anywhere near a newspaper or TV this week, you are well aware that the Dow Jones Industrial Average and
S&P 500 have hit new 12-year lows. This negative press makes sense since these are the barometers that most people look at
to judge market strength. On the other hand, we prefer to look to those benchmarks that track the investments that we are positive
on for the long-term. We have made no secret that we are bullish on the commodities group, precious metals and emerging Asia.
Therefore, we are choosing to focus on indexes in these areas this week. Our analysis is provided in the chart tabs below.

To summarize the charts, we believe that markets go through long-term bullish and bearish cycles that last between fifteen and
twenty years. The bullish phases are defined by an uptrend that goes on to higher levels following each brief corrective period.
The annual average return during these bullish periods is in the double digits. The bearish phases are defined by a long period of
consolidation that has a broad range top and bottom level. The market has violent swings within this confined range as the
excess of the previous bull market cycle are worked off. The annual average return of these bearish periods is usually negative as
stocks churn around a lot, but ultimately go nowhere. The US stock market as defined by the S&P 500 is currently in one of these
20-year bearish consolidation periods, whereas commodities and gold are in the midst of one of the long-term bullish uptrends. It
is not unusual for paper assets (stocks/credit) and hard assets (commodities/gold) to be in contrary cycles. As a result, we want
our portfolios leveraged to stocks and countries that are exposed to the hard asset cycle. We feel that this will provide the best
returns over the next ten years.

Global Market Update
We have attached charts of both China's stock market and the SPDR Emerging Asia Fund. As you can see by the attached
charts, the Asia markets are holding up much better than their American counterparts. We believe that this may be signaling
economic leadership from Asia in the years ahead.

US Sector Snapshot
The one area of the US markets that is doing relatively good is the technology group as measured by the Nasdaq 100 Index (NDX).
The NDX is still hanging on just above its November lows whereas the other two major indexes (the Dow and S&P 500)
have broken decisively below. This strong relative strength is one reason that we may see outperformance by tech stocks during
any counter trend rally we get over the next few months.

All of our short-term indictors are getting to levels that we have not seen since the October 10th bottom. The market bounced
25% in a matter of days following those oversold readings being registered. We will use the rubber band analogy. The
further it is stretched the more violent the snap back. We believe that the market is due for a major rally.




Summary/prices/quotes/statistics contained herein have been obtained from sources believed reliable and are not
The opinions in this report do not constitute, and should not be construed as, recommendations to purchase or
sell referenced securities and should not be the sole basis for an investment decision.
                                                                      The S&P 500 chart to the left should help to
                                                                      visualize the long-term bull and bear
                                                                      cycles that we discussed last week.

                                                                      The average annual return during bull
                                                                      phases is often double digits. On the
                                                                      other hand, the bear phases have low
                                                                      to negative average annual returns over
                                                                      long periods. This is the natural
                                                                      consolidation of all those bull market gains.
                                                                      This is what we illustrated in last week's report
                                                                      with our 10-year average annual return cycle work.

                                                                      It is important to note that there are often great
                                                                      buying opportunities during these long-term bear
                                                                      markets at the bottom end of the broad trading range.
                                                                      We believe we are fast approaching one of these
                                                                      cyclical troughs that should take stocks back
                                                                      towards the top of the bear market range.
                                                                      The bottoms in 1933,1938,1974 and 2002 are all
                                                                      examples of good countertrend rallies within larger
                                                                      bear markets.




Bear market consolidation   Bull Market   Bear market consolidation
1966-1982                   1982-2000     2000-Present
CRB Index (Commodities Research Bureau) since 1987
                                                                                                CRB Commodity Index (1987-Present)

                                                                                                This is an extremely important big picture chart.
                                                                                                It looks very similar to the chart of the Dow Jones
                                                                                                Industrial Average after the 1987 stock market
                                                                                                crash (see next tab). This illustrates to us that
                                                                                                commodities are not even eight years into a new
                                                                                                bull market. We believe this recent 46% crash was
                                                                                                only the end of the first phase of a 15-20 year
                                                                                                bull market for commodities.

                                                                                                CRB Index still 86% above bear market lows despite
                                                                                                recent crash. Media coverage of recent events fails
                                                                                                to mention this fact. When CNBC becomes a
                                                                                                full time commodities channel we will probably
                                                                                                be closer to the top.

                                                                                                This commodities bull market coincided with the beginning
                                                                                                of a major long-term bear market in US stocks. This has
                                                                                                often been the case throughout history due to an inverse
                                                                                                correlation between paper and hard assets. Even with the
                                                                                                recent decline, the CRB Index has still averaged 11.9%
                                                                                                per year return since the bull market began in late 2001.
                                                                                                US stock indexes are down dramatically over the same period.



Commodity bear market lasted for twenty-one    Double bottom ends 20-year bear market for commodities
years from 1980 though 2001. The average       First bottom in late 1998
annual return for the CRB Index was -2.2%      Second bottom in late 2001 gives birth to a new bull market
over this span!
                                                                                                           Dow Jones Industrial Average (1976-1990)

                                                                                                           The chart of the Dow Jones Index to the left
                                                                                                           shows that stocks were able to head to new highs
                                                                                                           just three years after the '87 crash. This is the
                                                                                                           definition of a long-term bull market. Each
                                                                                                           successive up-leg goes on to higher levels.
                                                                                                           The next chart in our picture series shows that
                                                                                                           looking back, the 1987 crash was just a blip on
                                                                                                           the screen. This decline simply marked the
                                                                                                           end of the first phase of a powerful bull market
                                                                                                           that would span 18 years. We believe the recent
                                                                                                           commodities crash was the end of the first phase
                                                                                                           of its bull market with at least ten more years to go.



                                                                                                           1987 Crash looks imposing up close.




The US stock bear market lasted for sixteen       US stocks end 16-year bear market in the summer of 1982.
years from 1966 through 1982. The average         The proceeding bull market lasted until 2000, but was interrupted by
annual return for the Dow Jones Index was -1.4%   the 1987 crash. In total, the Dow grew over 14x's during this span.
over this span!
                                             Let's scan out to look at the big picture……
                                             Ten years after the 1987 stock market crash,
                                             the Dow was 350% higher. Notice the classic
                                             bull market action of each leg going on to a
                                             much higher plateau. It is important to
                                             draw a distinction between these long-term
                                             bull and bear phases. As mentioned above,
                                             the bull phase keeps going on to higher
                                             levels after each correction episode.
                                             On the other hand, a long-term bear
                                             market trades in a huge trading range
                                             that amounts to a long period of consolidation.
                                             US stocks are currently in such a long-term
                                             bear market consolidation phase.




1987 crash just a blip in the big picture!
China Shanghai Composite Index (A Shares)


                                            The fact that China's stock market
                                            is still 33% above its October low
                                            seems to be getting lost in all the
                                            negative US headlines. We see
                                            this as a very important divergence.




                                            Chinese market showing no signs of
                                            revisiting fall '08 lows.
Emerging Asia Pacific Fund is
still 13% above its fall trough.
This compares favorably to the
S&P 500 which is almost 10%
below its fall lows. This is
excellent relative strength and
a signal that future economic
leadership may be coming
from this area of the world.
Gold Price from 1975



                                                                                                  Gold is in a world of its own right now as
                                                                                                  global central bankers trip over each other
                                                                                                  to print more bailout money.

                                                                                                  This long-term chart is also a good
                                                                                                  visual to see the long-term bull and bear
                                                                                                  cycles of asset markets. In addition, it also
                                                                                                  shows the inverse relationship between
                                                                                                  paper (credit/stocks) and hard assets (gold/commodities).


                                                                                                  Gold bull market begins in 1999. Gold prices are
                                                                                                  259% above the 1999 low while US stocks are
                                                                                                  45% below their 1999 lows.




Bull market ends in 1980 for gold   Long and painful 19-year bear market consolidation follows,
                                    but the Dow gains over 10,000 points in the same span
                                                                                                     3/6/2009
                              Intermediate-term Technical Indicators                           Weekly Market Data                               Short-term Technical Indicators
                                 NYSE         OTC          Option       Avg Sector        Global        Corporate                      High Low       High Low         NYSE          OTC
                                 Bull %      Bull %        Bull %         Bull %          Bull %         Bonds                          NYSE             OTC         10-week       10-week
                              13.61%        15.96%        15.65%         14.98%          24.51%           Sell                          0.58%           0.8%          7.93%        13.52%
                                O's           O's           O's            O's             O's            O's                            O's             O's           O's           O's


                                                                                                      Starboard Sector Matrix
                            0%                                                                                       50%                                                                                100%

         Sector                          Low Risk Sectors                                                     Average Risk Sectors
                                                                                                             Bullish Percent Between 30-70%                                High Risk Sectors
         Matrix                      Bullish Percent Between 0-39%                                          Bullish Percent Between 40-69%                               Bullish Percent Between 70-100%


  Higher Return Potential                 NW Quadrant
     Positive Relative                     Buy Zone
         Strrength           Chem- 10%                Soft- 26%
                                           Osrv- 14%    Inet- 26%
                              Oil- 10%      Busi- 18% Semi- 22%
                                           Drug- 20%   Gas- 24%
                                            Biot- 22%
                                            Wall-14%  Mach-8%
 Average Return Potential                  Fina- 14% Savg- 16%          Rest- 34%
     Mixed Relative                       Heal- 20%   Util- 14%         Tele- 26%
        Strength                           Metl- 18%  Prot- 22%         Prec- 38%
                                          Comp- 16% Medi- 14%
                                           Bank- 8% Wast- 14%           Auto- 24%
                                          Food- 16%   Retl- 16%
                                          Hous- 10%
                                           Buil- 12%
  Lower Return Potential      Stel- 6%    Game- 10% Real- 12%                                                                                                                     SE Quadrant
    Negative Relative         Aero- 8%    Tran- 10%                                                                                                                               Danger Zone
        Strength              Text- 6%     Elec- 12%
                              Fore- 6%     Leis- 12%
                                           Insu- 12%




Please see "Guide" tab for more details about the sector matrix




This copywritten material has been provided by Dorsey Wright & Associates.
Statistics contained herein have been obtained from sources believed reliable and are not necessarily complete and cannot be guaranteed.
The opinions in this report do not constitute, and should not be construed as, recommendations to purchase or sell referenced securities and should not be the sole basis for an investment decision.
 Report Key           Sector
     Aero        Aerospace Airline
    Auto           Auto & Parts
    Bank               Banks
     Biot          Biotechnology
     Buil             Building
    Busi        Business Products
    Chem             Chemicals
    Comp            Computers
    Drug                Drugs
    Elec            Electronics
     Fina             Finance
    Food         Food & Beverage
    Fore        Forest Prods/Paper
    Game              Gaming
     Gas            Gas Utilities
    Heal            Healthcare
    Hous         Household Goods
     Inet             Internet
     Insu            Insurance
     Leis              Leisure
    Mach        Machinery & Tools
    Medi               Media
     Metl       Metals Non Ferrous
      Oil                Oil
    Osrv            Oil Service
    Prec          Precious Metals
     Prot      Protection Equipment
    Real            Real Estate
    Rest            Restaurants
     Retl             Retailing
    Savg         Savings & Loans
    Semi          Semiconductors
     Soft             Software
     Stel            Steel/Iron
    Tele            Telephone
    Text        Textiles & Apparel
    Tran       Transports (Non-Air)
      Util        Electric Utilites
    Wall            Wall Street
    Wast       Waste Management

Green letters= Bullish Bull% Chart
Red letters= Bearish Bull% Chart
Global iShares and Closed-end Funds Relative Strength (RS)
Source: Dorsey Wright & Associates
                                                         Point     RS        RS       RS        RS
                                                       & Figure   Signal   Column    Signal   Column    Total
Symbol      Name                                        Signal    vs US     vs US   vs Gold   vs Gold   Points
CEE         Central European Equity Fund                 Sell      Sell       O       Sell       O        0
CH          Chile Fund Inc                               Buy       Buy        X       Sell       O        3
EEM         iShares MSCI Emerging Markets Index          Sell      Buy        X       Sell       O        2
EWA         iShares MSCI Australia Index Fund            Sell      Buy        O       Sell       O        1
EWC         iShares MSCI Canada Index Fund               Sell      Buy        O       Sell       O        1
EWD         iShares MSCI Sweden Index Fund               Sell      Buy        O       Sell       O        1
EWG         iShares MSCI Germany Index Fund              Sell      Buy        X       Sell       O        2
EWH         iShares MSCI Hong Kong Index Fund            Sell      Buy        X       Sell       O        2
EWI         iShares MSCI Italy Index Fund                Sell      Buy        O       Sell       O        1
EWJ         iShares MSCI Japan Index Fund                Sell      Buy        X       Sell       O        2
EWK         iShares MSCI Belgium Index Fund              Sell      Sell       O       Sell       O        0
EWL         iShares MSCI Switzerland Index Fund          Sell      Buy        X       Sell       O        2
EWM         iShares MSCI Malaysia Index Fund             Sell      Buy        X       Sell       O        2
EWN         iShares MSCI Netherlands Index Fund          Sell      Buy        O       Sell       O        1
EWO         iShares MSCI Austria Index Fund              Sell      Buy        O       Sell       O        1
EWP         iShares MSCI Spain Index Fund                Sell      Buy        X       Sell       O        2
EWQ         iShares MSCI France Index Fund               Sell      Buy        O       Sell       O        1
EWS         iShares MSCI Singapore Index Fund            Sell      Buy        O       Sell       O        1
EWT         iShares MSCI Taiwan Index Fund               Sell      Sell       X       Sell       O        1
EWU         iShares MSCI United Kingdom Index Fund       Sell      Sell       O       Sell       O        0
EWW                                                      Sell
            iShares MSCI Mexico Investable Market Index Fund       Buy        X       Sell       O        2
EWY         iShares MSCI South Korea Index Fund          Sell      Buy        X       Sell       O        2
EWZ         iShares MSCI Brazil Index Fund               Sell      Sell       X       Sell       O        1
EZA         iShares MSCI South Africa Index Fund         Sell      Sell       X       Sell       O        1
EZU         iShares MSCI EMU Index Fund                  Sell      Buy        O       Sell       O        1
FXI         iShares FTSE/Xinhua China 25 Index           Sell      Buy        X       Sell       O        2
GF          New Germany Fund Inc                         Sell      Sell       X       Sell       O        1
GRR         Asia Tigers Fund Inc                         Sell      Buy        O       Sell       O        1
IF          Indonesia Fund, Inc.                         Buy       Sell       X       Sell       O        2
IFN         India Fund Inc                               Sell      Sell       O       Sell       O        1
INP         iPath MSCI India Index ETN                   Sell      Sell       O       Sell       O        1
IRL         Irish Investment Fund                        Sell      Sell       O       Sell       O        0
IYY         iShares Dow Jones U.S. Total Market Idx      Sell     None        O       Sell       O        0
JFC         Jardine Fleming China Region Fund            Sell      Sell       X       Sell       O        1
KF          Korea Fund Inc                               Sell      Buy        O       Sell       O        1
MXF         Mexico Fund Inc                              Sell      Buy        O       Sell       O        1
SGF         Singapore Fund Inc                           Sell      Buy        O       Sell       O        1
SNF         Spain Fund Inc                               Sell      Sell       X       Sell       O        1
SPX         S & P 500 Index                              Sell      Sell       O       Sell       O        0
TF          Thai Capital Fund                            Sell      Buy        X       Sell       O        1
TKF         Turkish Investment Fund Inc                  Sell      Sell       O       Sell       O        0
TTF         Thai Fund Inc                                Buy       Sell       X       Sell       O        2
TWN         Taiwan Fund Inc                              Sell      Sell       X       Sell       O        1


           Bullish Percent=                             6.98%
     Status
    Bearish
     Neutral
    Bearish
    Bearish
    Bearish
    Bearish
Moderately Bearish
Moderately Bearish
    Bearish
Moderately Bearish
    Bearish
Moderately Bearish
Moderately Bearish
    Bearish
    Bearish
Moderately Bearish
    Bearish
    Bearish
    Bearish
    Bearish
Moderately Bearish
Moderately Bearish
    Bearish
    Bearish
    Bearish
Moderately Bearish
    Bearish
    Bearish
Moderately Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
    Bearish
Moderately Bearish
    Bearish
                    Global Bullish Percent Risk Monitor
92                                                                            92
90                                                                            90
88                                                                            88
86                                                                            86
84                                                                            84   70% and Above= Higher Risk
82                                                                            82
80                                                                            80
78                                                                            78
76                                                                            76
74                                                                            74
72                                                                            72
70                                                                            70
68                                                                            68
66                                                                            66   Green= Bullish Percent in X's (buyers in control)
64                                                                            64   Red= Bullish Percent in O's (sellers in control)
62                                                                            62
60                                                                            60
58                                                                            58
56                                                                            56
54                                                                            54
52                                                                            52
50                                                                            50
48                                                                            48
46                           China                                            46
44                                                       Japan                44
42                                                                            42
40                                                                            40
38               Global BP                                                    38
36   Indonesia                                            Taiwan              36
34                                      South Korea                           34
32                             Asia              Latin America                32
30               Middle East                                         London   30
28                                                       Australia            28
26                                                                            26
24                                                       Thailand             24
22               Singapore              Hong Kong        Canada               22   30% and Below= Lower Risk
20   Germany                   Europe                    Malaysia             20
18               India                                                        18
16                           Switzerland                                      16
14                              US                                            14
12                                                                            12
10                                                                            10
8                                                                             8

     Source: Dorsey Wright & Associates
s (buyers in control)
(sellers in control)
Sector Matrix Description

The Starboard Sector Matrix will try and help us identify which of the 40 Dorsey Wright sectors are the most attractive on a risk/reward basis.

The analysis in the matrix combines two concepts
1. Sector Bullish Percent (risk)
2. Relative Strength (potential reward)

Sector Bullish Percent
The Bullish Percent of a sector is simply a compilation of the percentage of stocks in that sector whose charts are on a Point & Figure (P&F) buy signal
Sectors rotate in and out of favor over time. The Sector Bullish Percent charts provide a snapshot of supply/demand and helps measure risk
When the chart is in X's that means demand is in control; When chart is in O's then supply has taken over
It is a useful contrarian indicator used to measure the amount of bullishness and bearishness towards the given sectors
The higher the percentage of stocks in a sector on a P&F buy signal, the greater the risk and vice-versa.
When over 70% of stocks in a sector are on a buy signal it raises the caution flag (especially when supply takes over and chart goes into O's)
When under 30% of stocks in a sector are on a buy signal, it is usually time to start putting a shopping list together
The Sector Bullish Percent risk spectrum is represented in the top row of the matrix from 0 - 100%

Relative Strength
Relative strength is a comparative analysis used to measure the performance of one asset to another.
Positive relative strength is correlated with outperformance and like Bullish Percent can be charted using the P&F charting methodology
The relative strength analysis provided by Dorsey Wright compares each sector to the market via four different proprietary indicators
These indicators are then cross referenced to determine the strongest relative performers, thereby providing us with a disciplined methodology for measuring potential reward.
The relative strength potential reward spectrum is represented on the side column from high to low relative strength

Ideally, we are looking for sectors to fall into the NW quadrant because of low bullish percentage (lower risk) and positive or improving relative strength (higher reward potential)

								
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