Hi Michael, Your facts are somewhat skewed because you are not looking at enough history. I just recieved this link a few days ago from a friend. It is about the markets and their direction based upon a historical perpsective. The videos are about 20 minutes. I am not promoting the site or their services, just offering information to those that are interested. http://gannglobal.com/v/sp05/?img=140&kbid=1436
Just curious why you dont simply daytrade the ES and give worrying about the long term picture. It seems to me that daytrading is by far the least risky way to approach the ES. You can trade just about any size you wish and be out at the end of the day and sleep peacefully.
Since your original post practically BEGS for a snap-the-head-back-right-jab...first the gratuitous personal swipe: you have a tendency to be a bit of a windbag. Standing aside from this issue, I am inclined to trade on your side of the ledger at this point. I believe in the existence of broad markets cycles. I lean toward your interpretation of this one. However, I can't trade upon this for more than one reason - the chief being that this issue fades in relevance as one's trading timeframe gets shorter. Oil? Yeah, I'm one of those guys who believes that there will be a period of significant dislocation because of the Peak Oil scenario. Will this necessarily manifest itself as a doomsday market situation in 2007? I believe that it is folly to make a prediction this specific. The shit could hit the fan in 2008...2009...2010...2015. Nobody knows for SURE...so, I can't trade THAT concept either. Similarly for bonds. I'm inclined to go with you on that one, BUT, there are better ways to gauge the present health and future prospects of the market than shooting a bullseye on the direction of the 10 Year yield. If you look beneath the surface (indices) of the domestic equities markets, glimmers of a market breakdown are appearing. Secondary issues are, in a broad sense, showing signs of lagging. Generally this condition indicates a higher than normal likelihood of forthcoming market weakness. I wouldn't be at all surprised if your prediction comes to pass.
I do think that the SPX is a good buy and hold index and serious money made...that is if your investment horizon is 20+ years and you buy on pullbacks. You know that the SPX has 1 of either 2 cycles. It either goes straight up or chops up and down. Either cycle has tended to last between 15-20 years. So during the chop-chop cycle, you accumulate on obvious pullbacks. Then you keep holding and wait until the next cycle. Keep accumulating on the way up and then finally dump when it reaches the top of the cycle. In January 1950, the SPX was at 17 dollars. In October 1968, it reached 109. 6.4X return on your cash. 35% per year average. Then came the chop. In April 1982, the index was still right around 109. A 0% return (except for dividends) for 14 years. Then came the ultimate run. 109 to 1550 in another 18 years. 14.2X. Average 78% each year. So at the end of this chop will be a magnificent run and the SPX should be bought on any pullbacks. The above scenario, though, is not trading and more appropriate as a buy/hold strategy in a retirement account that revolves around the S&P500 index.