Sorry, but I am not buying that the rally we got this week marks a resumption of the bull - at least not yet. I won't go so far as to say the bull is dead, but this ain't no "pause" either.
It doesn't take a chart expert to see that the ferocity of last week's decline - specifically the 'velocity' of the decline and associated volume - looks to me like the sudden drop was not based on a 'fluke' or happenstance.
Besides the China explanation - why did it happen, and what happens next?
First theory - Alan Greenspan implied a recession is just around the corner. If you go by the 'six month rule' which is that the stock market discounts a recession six months in adavance, then a recession should hit around the first of September.
Second theory - A normal correction is overdue, since we've been getting a more or less non-stop run since around Aug 2006. Markets never go up in a straight line. The bull is intact, but a 10% correction now is normal and maybe even expected at this point. Load up after the next wave down.
Third Theory - The bull is officially dead. Although it is an election year, the bull market has been going since March of 2003. We just hit the four year mark. It's not unusual to get a bear market after this long. The 1990s were a fluke.
Fourth Theory - The drop is over and it will be remembered as just a blip in the continuing bull market.
Which theory will bear out is anyone's guess. If I knew I would already be retired.
In dividend news...Colgate Palmolive just increased their dividend 13% - I like it!
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment