The question that needs to be asked about this current
market is simply, "is this 1995 all over again or will some sort of
reality take hold?" The answer to
that question will predict how this market behaves for the next several
years. While I fully understand why the
market feels like it will not ever go down again in all of human
history (The January Effect), this rally is now pushing the borders of
absolutely absurd. So I fired up the charts
and took a look under the hood of this current bout of insanity.
Current Reality
I feel the best way to look at "current reality"
is through the distance from the 200 Day Moving Average on the
S&P weekly chart. The size of the weekly
chart gives great historical perspective.
Simply, the mania of the 1990's ended in March of 2000, and since then, the market has had a totally different feel.
