Courtesy of Dr. Paul Price of Market Shadows
There's a repeating pattern. Some technical analysts are screaming to "Get out now!"
The three peaks were not identical in nature.
While the patterns looks similar, the fundamentals of those three tops were very different. The year 2000 pinnacle clearly marked an overvalued and unsustainable frenzy. P/E multiples on blue-chips and tech stocks were excessive. The market’s price/dividend ratio was absurd.
The top of 2008 was more a result of crazy credit markets than outlandish multiples. The Bear Sterns fiasco preceded the Lehman bankruptcy which led to the AIG bailout. The banking system was in jeopardy as money market funds and commercial paper became suspect.
The second-half 50% decline blindsided many investors and fund managers because it did not originate from clearly overpriced conditions.
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http://www.gurufocus.com/news/228434.
