InvestorDashboards

Reaching for the Bottom in the Markets

This looks a lot more like 1962 to 1983, flat for 20+ years. 1943 to 1962 was a nice bull run, just like 1983 to 1999. Flat means that a buy-n-hold position ends up with zero capital gains. But during those 20 years, there were many up 100% then down 50% swings. We seem to be experiencing periods of about 7-8 years now (period = time from a high to the next high) versus the 3-4 year periods of the '62-'83 timeframe.

Given those beliefs, we will be due for a nice bull run again starting in 2037.

Fear Still Dominates, But Probabilities Point to An Impending, Positive Rally

The period from 1999 to 2036 is shaping up to be a lot like 1962 to 1983 - essentially flat if you buy-n-hold, but with several down 50% then up 100% runs with each leg lasting multiple years, and ending the longer period at 0% capital gain. As bookends to the flat time, 1983 to 1999 was a very nice bull run and so was 1943 to 1962.

Mr. Hannon is perfectly right, in our opinion. The current market may test the 2002 low, which could happen in only a day or two given 1000+ point DJIA trading range per day. But investing now, assuming ability to hold a long position for three to four years, seems very logical. The current sideways market looks to have a period of about 7 to 8 years, vs. the '62-'83 market's 4 year period (period = time from high to next high, or time from low to next low).

These opinions result from technical analysis, but the data are simply a reflection of human sentiment and imbalances of supply and demand. When multiple methods of market analysis all come together, it is time to pay attention.

How Low the S&P 500 Could Go

Did the same analysis this morning. For the next 30 years, DJIA oscillates between 7000 and 15000 in periods of about 7 to 8 years. Similar to period 1952 to 1983. Pre 1952 was nice bull run. 1983 - 1998 was nice bull run. Post 2038 should be a nice bull run.