We have warned of decline…26% or so, will it be an Opportunity?
Some investors and above all major brokerage houses have little use and contempt for “technical analysis” and even greater dislike for cyclical analysis. Why? It often tells people what they don’t want to hear such as the stock market is overvalued headed down or worse yet that their own stocks are overvalued and heading for large declines. Brokerage houses do not want technical analysis because it advises at times that stocks are overvalued and better buying opportunities will happen later!
Waiting entails no business in the meantime…so read between the lines.Our view remains the same, an overall decline in the 25% to 30% range for the Standard and Poor’s 500, some stocks more, some stocks less. We will attempt to inform you when the decline is over, for years we were quite good at it.
The weight of the evidence has been overwhelming that a major decline was coming. LOOK BACK AT WHAT WE HAVE WRITTEN ON THIS SITE FOR THE LAST YEAR…..Major distribution (topping process) has been ongoing; but keep in mind that it badly interferes with some peoples’ business to alert the public; so the public is not alerted……until after the fact with excuses!
The promoters and major brokerage houses have promoted and enabled the stock market to hit EXTREMELY OVERVALUED PRICE LEVELS. THEY NEVER INFORMED INVESTORS THAT OFFICERS AND DIRECTORS OF THE PUBLICLY TRADED CORPORATIONS WERE SELLING THEIR OWN PERSONALLY OWNED SHARES AT NEAR RECORD HIGH RATES. Some weeks in 2015 saw the officers and directors selling over $5 hundred million ($500,000,000) of their own shares during one week with other weeks near the same levels of “insiders dumping” their own shares.
For three years, I have suggested that the stock market faced a 25% decline which would have corrected the overvaluations. Due to near zero interest rates and artificial support brought about by central banks buying stocks aided and abetted by high frequency trading, the market avoided what would have been beneficial moves down to more proper value levels offering far better buying opportunities.Note, while we may seem bearish, we are always invested but always are looking for opportunities.
What people overlook is the fact that brutal corrections in stocks and bear markets can and do provide so many opportunities to accumulate shares when they are “on sale.” Few ever take advantage…ever…..You cannot change human nature. I might add that there are numerous stocks that are now at very undervalued prices.
And as for the major cycles
The cycles, which in my opinion may be more important than fundamentals, suggest that we are in the early stages of a long bear market for industrial stocks such as the Dow Jones and Standard and Poor’s 500. But for the good news, the major cycles suggest that we are beginning a new bull market in gold and mining stocks.
This following is what I wrote on this site last May 14, nothing has changed.
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