A.I.M. Users Bulletin Board

[SFSecurity]

Hi Gang, I think I might have a better handle, or might only be delusional, about the time frame for the next downturn in the market. Of course this is only a wild hare guess but from looking at a number of historical cycles and and how current indexes are playing out, my guess is that the earliest possibility is about 4 months from now and that we are likely to see the downturn start somewhere around or before 52 weeks from now.

I don't think it will start in four months because there is too much chaos in the political world at the moment and it will take a while before we see a truer sense of direction for the market. The exuberance that has been playing out since November is, I think, based on assumptions and, to some degree, wishful thinking.

Look at GLD, it started at about $45 at the tail end of 2004 and is now at almost $115, but inflation contributed about 25% of that so the constant dollar would be about $86, quite good overall, but..., when one looks at the prices it has run through since 2004 until now one sees that it peaked at about $184 in August of 2011 and has been downhill since then except for the last period when it went up from a low of about $108 just before Christmas last year to a high of about $120 during the last week of February and down to almost $115 now. Up a quarter the last day of last week, but will it continue? No clue but my guess it that the overall trend will be down, especially since the Fed is likely to raise rates, which makes bonds a slightly better deal than they have been. It'll take a bit to play out but that is my best guess.

And it is this guess that parallels my thinking about the market as a whole. Plus it has been 8 years since this bull market began, making it the third longest bull market in history and only 10 months less than the second longest bull market, but 24 months shorter than the longest. I'm guessing that there is too much chaos in too many areas for the bull market to last another 2 years.

Best,

Allen