Rambus has in the past put up some great arguments that the bull market has years to go and much higher prices ahead… I’ve never agreed with this as I have always though the deflationary undertow would eventually catch up with us and end the bull market. I believe that is where we are now and today I declare an end to the cyclical bull market which started in 2009. This bull was simply a counter cyclical bull market within the context of a secular bear market which started in the year 2000. In fact, the market action over the past 15 years has been a FED fueled money printing double top to that original 18 year secular bull market that started in 1982 and ended in 2000. Here is the big picture to get your head around:
So we now start the great bear market which will end in tears and destruction of an entire middle class that has placed its faith in the wall street gurus. Review my synopsis of a phase III decline and project that to the general stock market 4-5 years from now and that is the process we have now begun. It’s all there knights, here we stand at the beginning of the greatest bear market since the 1929-1932 affair. It actually may even exceed that bear market as the ascendancy phase of the previous bull was produced by an edifice of malinvestment the likes the world has never seen.
No one can predict accurately the ins and outs of the advances and declines which we will see, but I suspect over the next 3 months the kick off to this bear is going to knock everyones socks off. I see an incredible amount of complacency still after the past 3 days as hard for that to be possible. Again I certainly don’t know, but I am allowed to guess what lies immediately in front of us. It feels to me that we are now at the mid-point in a market crash. I have mentioned these crash sequences last 5-9 days typically and today was actually day 5 according to my numbering method. After the highest volume scariest day the market typically has a relief day followed by a renewed attack. Typically we have 4-5 hard down days. We have had 3 so far. Everyone is different, but this serves as a guideline.
I suspect our little gold bounce has now ended. Here is the GLD chart that has served so well over the past 6 months and it bounced off the upper bound. Interesting that I have not moved these two lines in the past 4 months
I am going to throw out some price objectives here. Don’t know if we hit them now or in a later crash in the next 1-3 months, but I suspect they will be hit. I will be a buyer if we hit these targets to play a counter trend BMR.
The lower SPY PO could be hit later this fall.
Here is another chart I put together back in January. Hard to believe how it has unfolded. But I based it off of my models from the psychological phases and what I was observing in the minds of the average investor. You can now see that we have in fact reached a POR and that is confirmed by the volume.