I agree. If you're following along on your Nikkei 90 playbook, we've now just found the very first bottom of any significance, the one followed immediately by a 14% rally in the Nikkei. Amazing coincidence. That single day was over half the rally, but it lasted several months as the market tried to imagine things getting better. That set the stage for the next six-month decline, which finally put in place the first real bottom, replete with news of recession and capitulation.
Of course, if this more closely resembles the 1930s, then the Fed is far, far behind the curve, and the downtrend could resume in a matter of weeks. The haste with which the major trend reasserts itself will help me to decide which wipeout scenario we find ourselves in.
I must say, while the situation is unbelievably similar to Nikkei 1990, we must remember that history doesn't repeat, but only rhyme. I find it extraordinarily difficult to believe that the market will be able to tread water at these levels in the face of the plummeting fundamentals.
Anyone know how quickly the Japanese economy deteriorated in the 1990s? Are we beating them? That's certainly my impression, given the implosion of the optical bubble, the saturation of PC demand, and the huge technology overcapacity now in place.
BC |
