Long term MIDAS

Below shows normal and nominal (volume variable = 1 and is represented by the dotted lines) MIDAS curves, anchored from the March 2009 lows (calibrated to March 10, 2009, to be precise) and the July 2011 highs. Using both serves as a porosity band. Yesterday's price penetrated the MIDAS curve that contained both the July 2010 and August 2011 lows. The middle subgraph shows detrended MIDAS.

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Longer term, the detrended Dow 30 MIDAS curve has re-entered its downward trend channel. I would note that the last down channel breakout in 1980 had a price top in April 1981, with a price bottom in July 1982 and a break of resistance that had held for 18 years a few months later. We could be in a bear that lasts throughout 2012, but its bottom could very well kick off the next secular bull market.

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For background, see this thread from the archives:

[URL="http://www.effectivevolume.com/showthread.php?3002-Detrended-MIDAS-Anchored-VWAP-Curve-from-1932-lows"]http://www.effectivevolume.com/showthread.php?3002-Detrended-MIDAS-Anchored-VWAP-Curve-from-1932-lows[/URL]