R.I.P. Bull Market, 1982-2008

Any readers of this column who have children know that kids need a firm set of rules that create structure in their lives. Some of this structure comes from the parents themselves, some from teachers in school, and still more comes from friends' homes and society itself. A youngster without structure in their life is likely doomed to fail at much of what they do.

(This, by the way, is not my personal observation. It is a sociologically accepted principle proved by countless studies done on children worldwide. Moreover, the findings just don't apply to children. Find me an adult with no structure, and you will likely find a very lost soul who is struggling to survive in virtually every facet of his life.)

Markets also need structure in order to grow, be healthy and thrive. And when that structure breaks down, the market takes on the same sense of a lost soul -- struggling to survive in virtually every facet of its "life."

Most technicians have been educated in a variety of indicators and studies to determine a security's or index's trend. Their basic bag of goodies includes trend lines, moving averages, Elliott wave counts, Fibonacci numbers, relative strength index, moving average convergence/divergence, stochastics, Bollinger Bands, and the like. Anyone even remotely technically inclined has been exposed to a host of these in her readings on technical analysis.

If you followed my research when I was chief technical strategist at Morgan Stanley, you know I use a little-known Far Eastern model that I learned many years ago to determine market structure. (Most technicians have very little knowledge of this model, and what reference material exists is very elementary.) I have used this methodology as my single most important indicator for more than 10 years and have made many countertrend, news-breaking market calls using it (including the precise bottom to the entire bear market pre-open on the morning of Oct. 10, 2002). It, more than any other model, shows me the lay of the land most clearly, and I have found to be more accurate than any other model out there.

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Rick Bensignor is president and chief strategist at Bensignor Strategies, a technical trading advisory firm that provides macro and micro technical and behavioral perspective across all asset classes, including on-the-fly analysis in real time. He was previously chief market strategist at Morgan Stanley Principal Strategies, responsible for providing the firm's proprietary traders with strategic investment and tactical trading ideas.