It's a bull until someone proves otherwise
Prices continue to refuse to go down regardless of the news. Trade war with China...no problem. Obama rattling his saber at Wall Street...big deal. Man, we've got a dip out there and we've got to BUY, BUY, BUY BABYYYY!!!!!
Price momentum is ALL that matters now. The only question is how long that continues.
Forget fundamentals. Forget PE ratios. Forget dividend yields. It's a joke to think any of that matters in this piece of stock market history. The ONLY thing that matters is price momentum...period. And until it turns, it's not going to stop.
The shorts are getting buried. The longs think they're geniuses. I've seen this movie twice before and I know how it ends. The difference next time is that the decline will be the 3rd in this large bear market. And guess what the number 3 is? A fibonacci number.
You may think I'm crazy, but I think that may hold some significance. The 74 decline was the 3rd, and the worst decline in that bear market from 66-74. It had more psychological power than the others. People were BEATEN at the 74 bottom. They were through. We haven't seen that type of psychology yet. You may think we have, but we haven't.
At the final bottom we'll see incredible values over the entire market. 7,8 maybe 9 times REAL earnings and dividend yields of 6% or greater. These values won't seem like much of a bargain to people who just lost about everything in the markets by buying in at the highs for the third time in 10 years and getting beaten liked a tied up goat for the third (and final) time.
No sir. When the final bottom comes, and I'm not sure when that'll be, NO ONE will want to own stocks. The transfer of wealth from weak hands to the Wall Street pros will be complete. The game will be over....at least until the next generation forgets and starts the process all over again.
But until then, nothing matters except price momentum. Nothing.
However, there are some interesting challenges just ahead for the momentum. 1060, the 38% retracement from the November 08 lows, lay dead ahead. Also, I believe the megaphone pattern is still in play, as it has morphed again into an even larger pattern that will complete with one more push to 1060 or so.
But if the markets defeat that, it'll blast off towards 1250. If that happens, I'd check my goat.
Price momentum is ALL that matters now. The only question is how long that continues.
Forget fundamentals. Forget PE ratios. Forget dividend yields. It's a joke to think any of that matters in this piece of stock market history. The ONLY thing that matters is price momentum...period. And until it turns, it's not going to stop.
The shorts are getting buried. The longs think they're geniuses. I've seen this movie twice before and I know how it ends. The difference next time is that the decline will be the 3rd in this large bear market. And guess what the number 3 is? A fibonacci number.
You may think I'm crazy, but I think that may hold some significance. The 74 decline was the 3rd, and the worst decline in that bear market from 66-74. It had more psychological power than the others. People were BEATEN at the 74 bottom. They were through. We haven't seen that type of psychology yet. You may think we have, but we haven't.
At the final bottom we'll see incredible values over the entire market. 7,8 maybe 9 times REAL earnings and dividend yields of 6% or greater. These values won't seem like much of a bargain to people who just lost about everything in the markets by buying in at the highs for the third time in 10 years and getting beaten liked a tied up goat for the third (and final) time.
No sir. When the final bottom comes, and I'm not sure when that'll be, NO ONE will want to own stocks. The transfer of wealth from weak hands to the Wall Street pros will be complete. The game will be over....at least until the next generation forgets and starts the process all over again.
But until then, nothing matters except price momentum. Nothing.
However, there are some interesting challenges just ahead for the momentum. 1060, the 38% retracement from the November 08 lows, lay dead ahead. Also, I believe the megaphone pattern is still in play, as it has morphed again into an even larger pattern that will complete with one more push to 1060 or so.
But if the markets defeat that, it'll blast off towards 1250. If that happens, I'd check my goat.
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