“There have been several articles as of late discussing that the next great secular bull market has arrived. Historically, secular bear markets have averaged about 14 years, and considering that we began writing about the current secular bear market cycle in early 2000, that would put the current cycle about 2 years away from it historic average. However, the reality is that this cycle is currently unlike anything that we have potentially witnessed in the past. With massive central bank interventions, artificially suppressed interest rates, sub-par economic growth, high unemployment and elevated stock market prices it is likely that the current secular bear market may be longer than the historical average. In either event we are likely closer to the end than the beginning and the next major stock market correction will likely be the last for this cycle.
There are several
fundamental reasons from valuations to the current level of interest rates that
support this viewpoint. The ... inflation adjusted, or “real”, ratio
of the stock market to the economy as measured by GDP... is beginning to push
levels that are normally consistent with cyclical bull market peaks rather than
where secular bear markets have ended…
…No matter how you slice
the data - the simple fact is that we are still years away from the end of the
current secular bear market. ...While I have spilled and exorbitant amount of
ink this week on all the reasons why the market is getting extremely overbought
and into very dangerous territory – I am not saying that you should sell everything and hide in cash.
This may sound very
counter-intuitive but the markets are being driven by the expansion of the
Fed’s balance sheet. Therefore, due to this artificial influence, the market
can move higher, for longer, than you can possibly fathom. It will end,
eventually, and it will end badly.” – Lance Roberts from streettalklive.com
The above is an excerpted summary of Lance’s original post. He includes several insightful charts to
support his arguments and makes the case with a lot more analysis than
presented here. For the full post see...
http://streettalklive.com/daily-x-change/1503-the-next-secular-bull-market-is-still-a-few-years-away.html
STOCK FUND
INFLOWS
The Investment
Company Institute (ICI) reported inflows into long-term domestic equity mutual
funds for the fourth week in a row. That
data was published today and is for 30 January 2012. Incredibly, there have only been 8-weeks of
inflows over the last 2-years before this January. The last time ICI reported 4-consecutive weeks
of inflows was exactly 7-trading days before the top on 18 February 2011. The market quickly fell 6% made an about
face, rose 8% and then went on a summer long 19% decline to bottom on 3 October
at 1099.
MARKET RECAP
Wednesday, the
S&P 500 crept up 1 PT to 1,512 (rounded).
VIX fell about 2%, to 13.41.
NTSM
The NTSM analysis remains HOLD on Wednesday.
Of the 4-NTSM indicators (Sentiment, Price, Volume and
VIX), only Price remains positive.
Sentiment was up another 1% to 62%-bulls as of the close
on Tuesday {calculated from selected Guggenheim (formerly Rydex) bull/bear
funds – I’m always a day-late on this indicator, so it is Tuesday’s data}.
As noted yesterday, that’s in the caution level. It needs to get to 67% before I have an
outright sell on the sentiment indicator and even then, the NTSM analysis
doesn’t run on only 1-indicator.
MY INVESTED POSITION
Based on a BUY
signal 7 of 9-days, and more importantly, consecutive closes above the prior
high of 1466, I moved into the stock market at 1471 on the S&P 500 on 14
January. I am currently invested in a
range of near 50% invested in stocks. 
