Well, it's that time again. After August comes September
and October, two of the diciest months of the year for
stocks. But wait, it gets worse, for next year is 2006
and time perhaps for the quadrennial low. As both the
big money and the smart money know, the market tends
to have a sell-off period every four years or so, and
2006 is it. I's well documented enough through time
that most market pros have respect for it.
As we move through the remainder of this year, do not
be surprised to see market punditry and forecasts start
to get tweaked to the downside. And, expect a number of
bears to proclaim that leg two of the long term bear
market is fast approaching. The spectre of 2006 will
change a fair bit of thinking across the grid.
The low volatility of this cyclical bull and the absence
of a good 10% correction so far does make one wonder. Still,
my strategy here is to stay with my disciplines and let others
do the tweaking.
In that regard, my advance monetary liquidity indicators
have started to perk up in recent weeks and the negative
divergence with the stock market has lessened. But it is
still early in the game to posit that the Fed
has made a directional change toward letting its foot
up on the liquidity brake especially since short rates
remain too low.
Tim Woods of Cyclesman hag good charts on the four year
cycle. Go to www.cyclesman.com/4-year_cycle.htm to see.
No comments:
Post a Comment