This is an important post. At least I think it is. I was going to say it was the most important post I had ever made, but I didn’t want to oversell it.
This morning, I was looking at a long-term history of the Russell 2000 (what else does one do on a Saturday morning?) and something caught my eye. I noticed how similar price action over the past few years was to the late 1990s.
Now I want to stop right here and say two things. First, I have to utter my “Tim is about to compliment himself, so he has to denigrate himself first, so he doesn’t look a complete douchenozzle.” So I’ve got plenty of weaknesses, not the least of which seems to be the chunk of human brain dedicated to buying and holding stocks is absent from my body. I don’t know how it happened, why it is this way, and God knows I wish it weren’t so, but it’s just not there.
What is there in its place is a supernatural ability to spot analogs. I’m not just talking about charts; I’ve always been strong with analogs. That’s probably why, as a kid, my IQ tests were so misleadingly high; they rely a lot of analogies, and I was amazing at them, so people were led to believe I was really smart. Ha!
So this analog-seeking super-twin-power is at your service here on Slope, because I doubt many others would have seen it with such sudden clarity. I put the chart into grid mode, and I tried my best to line up the germane areas:
And then, pen in hand, I carefully started to mark the similar data points. The one I’m most interested in is #18, since it marks the terminus of the Russell’s move in March 2000.
Let me jump in here and make an important point: this is not a “look, the top is in exactly right now, and we’re going to crash Monday!” type post. On the contrary, after some deeper analysis, my conclusion (which I am sharing with my SLOPE PLUS users in a separate post to augment this one) is that we’re heading higher. I’m not going to say how much higher (again, that’s just for my premium readers) but it’s high enough to give me, all at once, a sense of excitement, disappointment, and relief.
I do think, however, that the move from 17 to 18 is the final stage, and the scary part is, I think it could be a rocket-launch one. We are in the final move in which the few remaining bears either commit suicide or just quit trading for the rest of their lives, because the past 4.5 years have been so grinding and discouraging.
I can also sense the attitude change among both bulls and bears. The obnoxiousness and I-told-you-so disposition of the bulls is soaring, and overconfidence is rampant. And the timbre and tone of Slope is changing as well. In my own self, I have sense a deep and persistent disturbance – and despair – which just tells me what this market has done to me. And looking at stuff like Tesla – hell, yeah, it’s a great car, but Jesus Christ, this stock chart is just comic.
So the good news for the bears is that I seriously think we’re in the final throes of this disgusting insanity. The bad news is that we’re not just a few points away; I think we’re going to enter the final orgiastic bullish spasm which snuffs out the bears once and for all. And then all holy hell is going to break loose. I only hope we’re all still here to enjoy the fun, because witnessing worldwide financial mayhem, at long last, would put a twinkle in my eye.