The FED started showing they wanted the market to stop declining in November 1981
Date Discount Rate
-------- ---------------------
5/5/1981 14.0% Fed seemed determined to drop the market
11/2/1981 13.0% Fed next decides to support market
12/4/1981 12.0% Fed supporting market for Christams rally.
In March 1982, the DJI fell to new lows in February and March. The P-Indicator did not confirm the price lows by making lower lows, itself. The February Buy B8 reflects that divergence. Rallies don't always start immediately. But you can see that a rally did develop in March and April. The Sell S9 is a classic Peerless Sell. It was premature. Some are and some are not. We have
rules that tell us what to do when the signal does not work right away.
Note how prices make new minor highs in April and May 1982 with the P-Indicator not making corresponding new highs. There we call "divergences". They tell us a to expect a decline. This concept of divergences jumped out at me from looking back closely at the data from 1972 to 1982, the basis of the original Peerless.
P-INDICATOR NON-CONFIRMATIONS OF NEW PRICE HIGHS OR LOWS
The bottom in 1981-1982 took unusually long to form. That was an element surely
in allowing the magnificent Bull Market that followed.
