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In order to even become a true bear market, the US indexes
would need a correction of at least 20% off the highs. I
see that happening by 2015. This year, I believe there will
be a "pullback" in April or May of about 6-10% lower, followed by
a retranching higher, followed by a severe correction in the autumn
to 1500s/1600s. Meanwhile, select emerging markets will not fall,
especially Europe if the Euro QE happens (pay attention to the news this
coming Friday Apr 3 concerning this). Also see strength in the Brazil and
Indian markets, and SE Asian, but not necessarily in China or Japan.
2015 will be a full on bear market for US equities. The S&P will close 2014
with about a 12-15% loss and 2015 with a further loss, then 2016 will
snap back on election shenanigans.
Very good post, not sure if you are right, but this sounds good.
All the media is saying the stock market is in a bubble. I know we are well off our lows but except for the internet stock (which are always frothy) many stocks are still cheap. Look at banks and financials. Imagine where they will be in 5-10 years with some looser regulations.
I see frothiness in the IPO market and some tech areas but there are many stocks that just aren't that expensive.
In order to even become a true bear market, the US indexes
would need a correction of at least 20% off the highs. I
see that happening by 2015.
Not looking so far. Anything could happen in a year. It is not a bear market at the moment. I do not think it is a good idea to brainwash ourselves for coming event at specific time. I prefer to monitor and analyze market on daily basis. When it come I will see. We will have high volatility and row of bad news prior to a crash. Until then I do not worry much.
As of now, oil production is expanding. Just a couple of month ago Russia was our friend. Now, New potential big enemy (Russia after events in Ukraine) may generate new investments into the military (drones and other technologies). Investments into the military always push the economy. You should remember strong recovery in February 2003 after the crash - war in Iraq began at that time...
I don't think we ever left the cyclical bear market that started in 2000. The previous cyclical bear started in 1966 and didn't end until 1982. 18-20 years for cyclical bear markets is pretty normal.
Interesting comment, not sure that I agree 100%.
To be sure, a lot of the current run-up in equity prices is attributable to QEIII. However, in the terms of actual structural economic growth, I note at least two significant differences since 2000 which have brought the economy to a new level:
1) hand-held mobile full-service telecommunications/computing devices are ubiquitous worldwide, and at increasingly affordable prices;
2) fracking in the US and spreading to other countries.
However, I have heard that the benefits of new fracking "wells" are mostly upfront and then the rate of depletion is fast, so the benefits may be short-lived or not as great as some hope. But I do not know enough about oil & gas extraction to form my own view.
Guys I am on Stocktwits as "_flipper_" if you want to follow my moves.
Right now I am market neutral, focusing on individual stocks and etfs
via options. In order for me to lay on to the short side, 1840 would
have to fall convincingly, which hasn't happened yet.
OK, here is my prediction. The stock market will continue the seesaw upward trend for a couple more years. The Dow will reach or even break the 20000 level. Then with the uncertainties of new Presidential "leadership" we will see a substantial correction.
Why do I think this will happen. Because I will it. I need a couple more years of nice stock market growth so my retirement nest egg builds a sufficient cushion. After that I can sell off and coast or watch for future opportunities such as buying back in after a major slide.
I don't think my prediction has any less of a chance than a snowball's chance in.....
I've been very bearish on stocks for a long time (since about 1999, lol).
-If you look at the s&p since then, it's up nominally in inflation adjusted terms. The S&P was at 1,500 in 2000, 1,885 now. Look at oil since then. Healthcare?? Education? I bet inflation has been 6, 7% a year since then, at least.
Buffett pointed out in an article in fortune magazine, in 1999 or 2000, that the next 17 years in stocks wouldn't be as good as the last 17. It had to do with declining corporate profitability and/or rising interest rates.
Also, the recent froth in tesla?? and the bio tech sector, is that a sign of a stock market bottom? There's a feeling of invincibility in the tech world. Facebook acquiring whatsApp for $19 b. You could argue some of these tech wizards are more confident than the ones in 1998 or 2000. It seems like a massive bubble. I wouldn't be surprised if there is a huge tech bust in the next 5 years.
I'm going to say nasdaq 3,000 in the next 5 years. Maybe 2,500.
We're still in a commodity super cycle IMO, and that's usually bearish for stocks.
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