I just went through hundreds of very long term big board charts. Many are at levels at or below '94,'90, and '87 bottoms. I concentrated on old line companies like GP, FNM, EK, IBM, G, F, KO, MMM, etc. The long term down trend that started in the late '90s persists and now has infected the recent favorites like HCA, HD, KO, XOM. Maybe one should say these favorites are where people have hidden to avoid the selling storm.
The trend gives little sign of an imminent change in direction. That would take something like a complete repeal of tax on capital which is highly unlikely to occur. However, recent price has diverged so far from the major down trend that an extended rally is highly probable and has already begun.
One of the characteristics of such a rally is the seeming threat of new lows. Whereas it is the case that many old line companies are finally getting to new 10 year lows, at the same time the better, newer companies have put in major bottoms and are started up. When the old line companies go to new lows the newer companies merely correct their in tact up trends.
Elsewhere we've discussed why the market is undergoing this trend. It boils down to the ability to inflate is being deflated. One can't expect that top line growth is assured simply because of established propriety.
The biggest cause of the inability to easily get what has been given comes from the advent of the information age. If that's the main cause for the apparent malaise, then the only investing solution is to be involved with companies that are bringing the information age's constructive destruction. Initially that is companies which are delivering the hardware that makes the information age go. To the extent that any company is involved with that kind of activity, to that extent that company is prospering.
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