Nearly five years ago, I wrote a post called Color and the Mania in this Valley (you might want to re-read it; I think it’s pretty good). In it I mentioned how, many years earlier, a company opened up adjacent to my start-up, Prophet:
Next door to us was a startup called DoDots. They appeared out of the blue and had $20,000,000 dropped into their laps for a product which – as far as I could tell – was absolutely useless. It needled me that someone could dream up an idea – – and, in my mind, a really lame idea – – and, without a single dollar of revenue, let alone profit, get a check for twenty million dollars to pursue their “dream.” I admit I was a little jealous at not having that kind of cash at my disposal, particularly since I had worked hard on a legitimate enterprise for years.
Well, here we go again.
The central bankers (this time, by way of Draghi) have jawboned the market into another explosive rally. I’d like to point out something that may be of interest to you, however. Kindly look at the chart below:
I think these speak for themselves:
After I did my Whole Foods Bear Market post late last month, I started hunting around for other interesting parallels: that is, stocks which had topped out around 2006-2007 and then went into a complete, utter, and stunning free-fall. The additional requirement, of course, was that they be exhibiting a topping pattern as of right now. My thesis is that these are sample “canaries in the coal mine” which illustrate far better than the insanely-manipulated /ES market how unhealthy equities are.
First is Pier One, that purveyor of throw pillows, scented candles, and coconut monkey dolls:
September and Q3 are officially in the books.
Summer bears are likely mostly happy, Dennis Gartman’s outlook on the S&P 500 notwithstanding.
There’s been a lot of talk about is this more 2011, or 2007/2000?
Calling Doc Brown. Fire up your flux capicators to 1.21 gigawatts, as we take a trip back in time.
1. SPX analog vs. 2011 on the monthly chart