Well, I'm done with my exam, and wow, it was a tough one. I'll be kind of stunned if I actually manage to pass it. I'll find out in a few weeks, I'm told.
Speaking of stunned, that's how I felt (mildly) when I saw this in today's Barron's, which I've scanned in for you:
I honestly thought it wouldn't be until autumn that we say this kind of public sycophancy. I mean, seriously. "Thank You"? Isn't it just a little premature?
But Sy Harding might be right in this respect – – maybe 2009 will be the bottom of the bear. I've tried to look at the long-term charts with fresh eyes, and I'm starting to question my oft-repeated notion that we're going to claw our way to 1,050 by autumn and then plummet to the 400s on the S&P.
I'm actually thinking there's another strong possibility – – one which I'd love short-term but will like a lot less longer-term, and it is this………….
- Start softening up very soon, and make our way to just about (or a little below) last month's lows;
- That would make the low for years to come, but………..
- We'd be range-bound for many, many, many years
Item (1) is actually pretty close to what I've read Atilla declare a number of times recently. As I look at the long-term (and I'm talking about the entire history, on a daily basis) S&P chart, it occurs to me that the wipe-out we've seen so far has done just about all the damage it can do, and there's only a little more downside left below last month's lows (side note: can you believe that term – "last month's lows" – doesn't the low at 666 seem like it was years ago?)
On the other hand, looking at another major index – the Transports – I can actually see a lot more downside.
The dreadful possibility is that……….after we're done thanking Mr. Obama……….we could be in for basically a market that, year by year, people are less interested in. Take a look at this chart of the S&P 500 from the late 60s, 70s, and early 80s:
Let me put this into perspective. Imagine you trade one stock, and no matter what, the stock never seems to go much lower than $70 or much higher than $100. And imagine that stock behaves that way for twenty-five years. Kind of boring, isn't it? Well, that's what a market like the above would feel like.
So I think the prospect of a new bull market any time soon is not strong. And I think the prospect of a big Great Depression-style plunge is also more remote than I used to. My "preferred count", as it were, is a sooner-than-expected drop toward March's lows, and that'll be the end of the party. This is not wishful thinking on my part. I'd rather have a rock 'em, sock 'em, horrendous bear market that drags on for years. But I'm not so sure that's in the cards. I'll look at more charts this weekend to keep contemplating this.
