Courtesy of Read the Ticker.
This Dow Jones Industrial match up is too spooky, market sentiment is oooh so similar.
Reversal Base
2003 – End of Dot.com sell off, rally started with WAR in Iraq.
2009 – End of AAA paper with the Lehman sell off, rally started with the FED/BOJ/BOC/BOE saving the world.
Very negative sentiment, world was about to end!
Powerful Mark Up Trend
2003 to 2004 – The world didn’t blow up, US winning the War, stock prices return from where they fell.
2010 to 2015 – FED/BOJ/BOC/BOE saving the world every year, QE rolling over and over!
Consolidation
2005 to 2006 – Large caps just went sideways, all the action was in the US property market.
2015 to 2016 – Oops QE does not really create demand. China wobbles on lack of world wide demand, spends reserves to pay for stuff. China is the demand engine for the world.
Euphoria Blow Off Trend
2007 to 2008 – Low inflation, means lower interest rates that fuel property boom, happy days are here again, as the US housing market never goes down! Bad news is ignored, as it is different this time!
2016 to 2017 – TRUMPs spending plan will create a demand boom and will go easy on the banks, plus the FED/BOJ/BOC/BOE have the markets back, what could ever go wrong. Bad news is ignored, as it is different this time!
POINT: While a trend is extended in one asset class, look for asset classes that have been ignored or supressed. You can be sure the professional money managers are!
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Investing Quote…
..”Don’t take action with a trade until the market, itself, confirms your opinion. Being a little late in a trade is insurance that your opinion is correct. In other words, don’t be an impatient trader”…
Jesse Livermore
..“It’s not what you own that will send you bust but what you owe.”..
Anon
…“To me, the ‘tape’ is the final arbiter of any investment decision. I have a cardinal rule: Never fight the tape!”…
Martin Zweig
..”Money can’t buy you happiness but it does bring you a more pleasant form of misery”..
Spike Milligan
..”October: This is one of the peculiarly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.”..
Mark Twain
