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Predicting the direction of the stock market current position = bearish (should have gotten out in Feb 2004 and would still be out) |
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Predicting the direction of the stock market current position = bearish (should have gotten out in Feb 2004 and would still be out) |
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| 1. Fundamentals: the stage of the business cycle (early in a recovery) with low interest rates would seem bullish (money supply flattening
however, and interest rates may have bottomed, see
interest rate/monetary section) so probably neutral. The stock valuations still
seem high but by some methods (see valuation
chart#1 and chart#2 and chart#3 and chart # 4 and chart #5).
The most reliable cycle is the 18 month cycle (see pic) and
this should bottom in September 2004 (see pic.) (see cycles, and more cycles of dubious
value cycle#1 and cycle#2) The long term debt explosion casts a
huge bearish threat over the market, particularly if deflation unfolds. 2. Sentiment is got bearish in March 2003 (buy) and led to Saddam-War rally... note that the put/call buy signal tends to come early and the % bullish chart is more timely (see graph.) the sentiment issued a big sell Jan/Feb of 2004 and you should currently be OUT of the Market. (see current sentiment chart.) 3. Technical indicators (see March chart) was a strong buy in October 2002, a weak sell in Dec 2002 and a good buy in March 2003..and a sell in Jan/Feb 2004 so you should be currently OUT of the Market (see current technical chart.) 4. Elliott wave pattern may
have completed the bounce up off the lows (so be out just in case; the fact that the AD
line confirmed the highs suggest a further recovery high.) ( see chart) so sell (Prechter
thinks we are on the verge of a collapse) |
