MIDAS Technical Analysis: A VWAP Approach to Trading and Investing in Today's Markets
by Andrew Coles, David G. Hawkins
Inflation Adjustment
Now, let's use the price data that Professor Shiller provides and that have been adjusted for inflation (see Figure 6.16). This is a very different picture, indeed! First, there is no enormous very long-term uptrend starting in 1942; that year is just another low. Probably the biggest feature difference in this chart is the appearance of those four huge bulges in price, marked 1, 2, 3 and 4, separated by the lows of 1877, 1920, 1949, and 1974, marked by the arrows. On this scale, it appears that the current bulge, the fourth one, may not have completed going down. Notice also that these bulges alternate in their appearance; the first and third ones are smoothly rounded, but the second and fourth are jagged, with lots of volatility. ...
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