Finally the markets have started to succumb to bearish forces again. It started last week and now looks to carry on with its bearish trend until at least after the Fed announcement this week. The white elephants in the Nasdaq, like Facebook, also managed to execute a swan dive this morning.
I will also be forced to move my Cycle degree peak over, but I will wait on that until this decline starts to pick up more steam. Those who have never done any historical stock market research will repeat all the mistakes of the past, thinking that markets can’t crash when the fundamental analysts paint us a rosy picture. Hate to break it to you, but markets always end when the majority think it can’t. When those two words like “New Era” get regurgitated by all the parrots in the world, then the big party is over.
Back at the peak in 2000, the new era mantra was also repeated many times, so it’s nothing I haven’t heard or read about before. In Britain and the USA it was called the “Canal Age”, until the railroads came along and produced the new age of train travel. When the majority call it a great new age, then it is usually over and a market crash ensues with recessions or even depressions. In 2007 they had no clue that a recession was coming, but it sure arrived in a hurry.
Then, under the worst fundamental conditions, like in late 2008 the market turned by early March 2009 and then soared for another full 8 or so years.
The other indices have to follow and until they make a clear effort to join the bearish party, I use caution just incase we have another fake correction.