Market similar to 95

Discussion in 'Trading' started by shortie, Feb 26, 2007.

  1. Bernie Schaeffer thinks market is similar to that of 95. Of course, his guesses are probably as wrong as anybody's else.

    Overall, we continue to see a growing number of parallels between the current market environment and the market environment of 1995. Joseph Keating, chief investment strategist at First American Asset Management, recently pointed out in an article that the SPX's price-to-earnings (P/E) ratio fell to 17 as of the third quarter of 2006 — lowest since mid-1995. Meanwhile, the SPX has now gone 221 days without a two-percent correction. This compares to the 223-day streak experienced in 1995.

    Furthermore, we find the market in another in a low-volatility environment, as the CBOE Market Volatility Index (VXO) currently hovers around levels similar to those we saw in 1995.

    The market started an impressive rally in 1995, and while past performance does not guarantee the future, there are some interesting similarities. It is also worth noting that investors continue to build a wall of worry for the market to climb. To paraphrase the great contrarian Humphrey Neill "The crowd is most bold when it should be cautious and prudent and most fearful when it should be bold."
     
  2. nkhoi

    nkhoi Moderator

    what I do with Bernie alert is put it in spam filter, he still manages to get thru sometimes. :D
     
  3. Meanwhile, one of the biggest BULLS of all time was on CNBC this morning saying he sees eery similarities between now and just prior to the 87 market crash.
     
  4. you've probably seen this chart, I don't follow the talking heads, but it does seem similar.
     
  5. :) Boy it seems a lot of things have changed since 1987 and it may be hard to compare, for better or worse the economy is now becoming ever increasingly global. It is and shall continue to be a new day.
     
  6. There is just a flood of money out there. When I bring the topic of corrections up with my hedge fund connections they just say you have no idea what interest rates being as low as they have been has done.

    The market is in a surge of liquidity phase and I just don't know what year to point to for comparison. The problem is the BRIC play and all of Eastern Europe & Russia this is all heavy lifting and telecom. And technology as it relates to worker productivity - this seems to be really flattening out. Wide screen tv's, videos on an IPOD, WIFI... it's just nip and tuck stuff.
    I think identity theft and computer security is really holding everything back. Think about it we should be driving commerce through cell phones at this point in the software upgrade cycle pointing and clicking & buying all over the place. Why is it not happening. Why is 3G a flop?

    Without robots taking care of everything what is technology accomplishing right now? Making things smaller, using less heat, tweaking batteries...
    That's why this NEW ENERGY space is trying to fly now. The technology is ACCOMPLISHING something when it is scrubbing coal, creating alternative fuel sources, electric cars, etc. This is the kind of advancement that can really get a market going.

    Day by day though: Stepping back and reviewing the hourly chart patterns, today's early morning drop decisively cracked down through the rising 21 and 40 day moving averages on the hourly charts on Nasdaq, and remain below them on the S&P.

    Unless we get a follow-through to the late rally we had today, the indices appear to be rolling over in what could be a deeper downtrend starting, but we'll have to get confirmation of that over the next day or two.

    So I'm thoroughly confused. I think we have gone from investors all expecting a correction to no one expecting a correction in 2 weeks. Talk about whipsaw. Just don't like Greenspan talking about definite recession late 07 or 08 and the GDP revision on Wed... if it's ugly... look out below.

    >If the GDP revision is not so bad and we squeeze out YET another QTR of double digest returns- It's massive liftoff from Naz 2500 the next leg up.
    I would think we could retrace 70% of the correction from the ultimate Nasdaq high before truly cashing out.
     
  7. Quark

    Quark

    "This time, it's different." What a classic first post!