Recipe for a Major Blow-Off?

Recipe for a Major Blow-Off?

Here’s an updated look at the 30-yr secular bear market analog showing the Nikkei’s path since its all-time high of ~40K in 1989 vs. 30-yr bears traced out by the same index 1920-1950 and silver 1980-2010.  As I’ve said repeatedly,…...

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Massive Decline in Commodities vs. U.S. Equities Since 2008 Remains a Key Big-Picture Paradigm

Massive Decline in Commodities vs. U.S. Equities Since 2008 Remains a Key Big-Picture Paradigm

Depending on which index you use – SPX vs. DJI – commodities have fallen ~84%-87% vs. stocks since peaking in 2008, just as west-Texas crude touched ~$150 a barrel. I have discussed this reality repeatedly on the site over the…...

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Goldilocks 1950s-1960s Emerging as Most Likely Outcome for US Stocks?

Goldilocks 1950s-1960s Emerging as Most Likely Outcome for US Stocks?

Had a repeat of 1937 been on tap, the market would have followed through on last week’s ~300 bps decline with further weakness.  It didn’t and instead, rebounded strongly.  So, back to the drawing board. As you are well aware, I…...

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FDR Redux?

FDR Redux?

Anchored off objective, definitive swing highs from Jul-33 and Feb-15 that went on to register one year “pauses”, we are approximately at that point in Aug-37 where the market, having made a significant retrace of its initial bear market decline…...

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Equity Gains Since 2009 Lows Have Few Historical Precedents

Equity Gains Since 2009 Lows Have Few Historical Precedents

It’s been 117 months since the Dow bottomed on a monthly closing basis in March 2009 at ~7K.  Since then it’s rallied ~260%. There are essentially only four precedents for this magnitude of rally over a trailing 117 month period…...

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Gold/Silver Ratio - Confirmed August-1929 Style Break-Out & Cross-Asset Implications

Gold/Silver Ratio – Confirmed August-1929 Style Break-Out & Cross-Asset Implications

Below I plot the ratio of gold vs. silver.  August closed with a clean break above resistance dating back to the very early 1990s. A longer-term look at the ratio is even more revealing.  It shows that the bear cycle…...

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Contradictions Do Not Exist (Part 2)

Contradictions Do Not Exist (Part 2)

Over two years ago in Jun-16 I penned a post titled: “Contradictions Do Not Exist (Was May-15 Really a “Major” Top)?” Therein I noted that though US equities were at the time still marginally below their May-15 swing highs, they…...

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Excellent Place to Lay Down Longs for a Trip to 30K?

Excellent Place to Lay Down Longs for a Trip to 30K?

In the context of this week’s cycle-based work here and here, consider the following more granular and technical aspects of how the thesis presented therein (DJI –> ~30K –> Aug/Sep-18) could unfold. Specifically, note that the market’s Nov-17 parabolic blow-off happened to occur as…...

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US Equity Cycles: One Chart to Rule them All?

US Equity Cycles: One Chart to Rule them All?

Below I update a ~120-yr chart of the DJI with its associated linear regression plot and two standard deviation channels first revealed in this post in Jul-17. Red = extreme over-valuation and secular sells; light red = over-valuation; light green = under-valuation; green…...

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Winter is Coming

Winter is Coming

Having failed to put a new and final lower low in place in late May as I had expected, the DJI appears to have broken out of its falling resistance this week, potentially – and finally – fulfilling the end…...

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