ABIGAL
DOOLITTLE PREDICTS CRASH
Abigal
Doolittle founder of Peak Theories Research said on CNBC Friday, "We could really
be talking about a 50% correction….when we look at the long-term chart of the
S&P 500, it's showing a failed double top. Those peaks reflect an
outrageous borrowing binge over the last 30 years. The failure reflects the liquidity efforts of
the central banks starting in 2007 right through today.
Now,
there is a shot that the S&P 500 could continue to be inflated up toward
the old peaks of about 1550 for triple peak, but more likely the S&P 500 appears
to be in a relatively small head and shoulders topping pattern (see my 2 Feb
2012 blog post for a general discussion of that chart pattern) that could take
it down into a long-term descending trend channel. We're talking 20 year monthly charts so really,
over the long-term….the cause of the financial collapse, and probably the cause
of what is likely to be a coming recession as well, based on these charts,
(is)…GDP growth - it's in a descending trend channel. " CNBC video at…
I
don’t see the head and shoulders pattern to which she referred. There was almost a H&S pattern going back
a week or so, but the right shoulder didn’t develop because the market broke
upward instead of down. I do, however,
believe in the double or triple-top pattern in a bear market. One need only look at the page “Compare the
1966 Bear Market to the Current Bear Market” (link on the right of this blog)
to see that during the last secular bear market the tops and bottoms were
visited regularly.
I’ll
say this for the ad nauseam’th time (sorry to make up that word): we are in a
bear market that started in 2001 and it won’t end soon. Ms Doolittle is correct. What we don’t know is when the market will
turn down; is it now, or a year or two from now?
JIM
ROGERS PREDICTS CRASH
Jim Rogers’ 2012 global
outlook
December 22, 2011
Finance News Network interview with American investor and
author, Jim Rogers.
Jim
Rogers said, “... I’m not too optimistic about what’s going to be happening in the
world in the next two or three years, and maybe even longer. We have serious
problems in the United States. You know, in 2002 we had an economic slowdown,
2008 was even worse because the debt was so much higher. The next time around
the debt is going to be staggeringly higher. So, the problems are going to
continue to get worse until somebody solves the basic underlying problem of too
much spending and too much debt...for myself, I’m short stocks around the
world, I’m short American technology stocks, I’m short emerging market stocks
and I’m short European stocks….I own commodities…” Interview and transcript at…
JOHN
HUSSMAN PREDICTS…CRASH?
While John Hussman isn’t using the word”
crash”, he points out the risks are certainly there in his weekly market
comment. Mr. Hussman categorized the
current market condition as “overvalued, overbought, over bullish, rising yield”
syndrome.
He noted that while the above criteria produced several false
signals, the historic record shows 9-times from 1961 thru 2007 when the market
declined between 20% and 55% after the “overvalued, overbought, over bullish, rising
yield” syndrome occurred.
He wrote further, “My argument is certainly
not that stocks will decline immediately, nor that they cannot advance further
from present levels. Rather, the point is that even if such an advance emerges,
the likelihood of those gains being retained
by investors over the course of the full market cycle is
exceedingly small.” – John Hussman, PhD, Weekly Market Comment, 13 Feb 2012, Hussman
Funds http://www.hussmanfunds.com/
Regarding
the bearish opinions, I still think we have more upside ahead. That is mostly a guess though, and I will
change my invested position when the NTSM system issues a sell.
