Lee:
Here is a nice chart that may tell all when to be out of this market.
beta.iqc.com
Some of us may remember the economic misery of President Bush's administration--especially around November 1992. As soon as he was defeated, the market began its climb. Bush lacked charisma--something his predecessor and successor have in excess. Clinton's chart begins in November 1992.
If we go back to 1976--during the peanutman's malaise, and then in 1981, we would see something similar at the transition from peanutman to Reagan. However, Reagan's impact was delayed a bit due to Paul Volcker.
In 1980, Volcker believed he could fine-tune the economy with rates--and possibly accommodate the peanutman. However, he miscalculated. In 1981, he corrected his earlier attempts and began the process of choking inflation out of the economy. He was forced to raise rates dramatically nearly throwing the economy into depression. His gamble paid off and the Volcker Bull Market, which we enjoy today, started in August 1982. Reagan's charisma (and tax cuts) took it from there.
So where are we today? Well, we are about 10 months from transition of power to a probable dullard lacking charisma--none of the candidates has charisma. We also have a Fed chairman that believes he can fine-tune a raging economy. Hmmm. However, look at the chart again and check the patterns for the end of 1997, 1998, and 1999. With a dip in the INDU to 10700 or so, we would just about complete the same picture. My bet is that if we get to 10700 or so, we go to 13000 or so. Like last year, the money moving from the garbage-nets into the INDUs would do the trick. Maybe in January or February. If the Greenspeaker is erring like Volcker did initially, we will see inflation increasing and rates being forced-up. It is my belief, that in a raging economy, small rate increases over a relatively long period of time, are not noticed by the economy.
I won't be long in November 2000. |
