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Take A Deep Breath
MARKET OBSERVATIONS - 4/18
The Fingerprints Of A Secular Top?...No matter how wild this market action
seems, once again, this type of activity is not without precedent.
As you know, market periods exhibiting characteristic similarity are ones found
in historical extreme circumstances. A week or so ago, we
trotted out our "return engagement" chart for the price volatility surrounding
the '29 final top period. There were a few days in the current market two weeks
ago that were dead ringers for a few days of activity directly preceding the
"final bell" in 1929. Well if you thought that similarity was eerie, what till
you see what happens next:
...
***...We are simply stunned that the market of today could be so closely
repeating almost the exact experience of the 1929 top. Seriously. We never
thought we would see something like this actually unfold. ...***
4. Will the public panic? At the moment, the answer is NO. We still
believe that ultimately the answer will turn to a strong YES. As you know,
there was virtually no true fear exhibited last week. $8.4 billion came into
mutual funds for the week ended 4/12. Bullish sentiment numbers actually
increased last week as reported by Barrons. For now, the dangerous casino mind
set stands. We have not yet broken the "who wants to be a millionaire?"
mentality.
...
6. Are all the contrarian signs there for a meltdown in the broader tech
groups? YES History shows that there has NEVER been an
instance where a financial mania or asset bubble has ended in any way other than
badly. There are no soft landings for asset bubbles.
7. Is the stock market rational? From a long term perspective, the answer
is YES. Short term movements are anything but rational. The
market is an exercise in crowd behavior. Today, it is simply an online study in
human nature.
...
from:
http://www.contraryinvestor.com/mo.htm
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-- Forrest Bishop Manager, Interworld Productions, LLC Chairman, Institute of Atomic-Scale Engineering http://www.speakeasy.org/~forrestb
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