that's some good stuff augie, the bear market rallies off the april and sept 01 lows had larger distribution patterns before rolling over, the move down from the jan/march top this year has been as directional as the move off the october 99 lows in reverse and has cemented a lot of bearish sentiment. At the lows in october we saw equity p/c ratio last seen at the 90 bear market lows, we have about 4 months of mutual fund outflows (the public hates the market - they hate it at the bottom), we had a huge blow-out in rydex bear fund participation, and 94% bulls by market vane on bonds.
while valuations are no where near benchmark bear market bottoms, they weren't after the first drive down off the 1966 top, it took a disco and bell bottoms to take us single digit p/e ratios -gg-
Now the real gruesome bears believe we are just going to have 20-25% bear market rallies then rollover and go straight down like the 30's.
There is no evidence right now that we are anywhere near a 30's scenario, with 6% unemployment.
there are some other interesting cycles that come into play, the traditional 4 year cycle, many cycle bottoms end in the 2nd year of a decade, 1932, 1942 (actually 1941 off by a year), 1952 wasn't a market cycle year, but i started the womb to tomb journey that year, it was my cycle -g-, 1982 was the gold market/commodity market top, stock market bottom inflation adjusted, and bond market bottom, 1992 was the real estate bottom after the mania top in 1989, it was also a significant bottom for the nikkei.
Nobody has a crystal ball, but there is the possibility that the market has made a significant cycle low here, similar to the gold market low in 1982, the nikkei low in 1992, and we have at least 5 months, like we had of the 9/01 lows, and maybe more.
bearishness has become quiet fashionable, you know how things go in and out of fashion -g-
After the bubble burst on the nikkei and the huge bear market into the 1992 bottom, i'm sure most traders had conditioned themselves to trade the trend,
but they got farked for the next decade if they only sung the same tune.
AI
