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Strategies & Market Trends : Bob Brinker: Market Savant & Radio Host
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To: geode00 who wrote (15018)9/2/2001 1:35:27 PM
From: sea_biscuit  Read Replies (2) of 42834
 
From the article:

Hays noted particular similarities to the 1962 scenario. That year, the Dow bottomed at around 536 on May 28, then rallied to
around 620 (a 15.7% gain) before swooning for nine weeks. The index then hit a "lower low" 16 days after the Oct. 1 second peak
in the Arms Index. "But that cleared the air for a four-year bull market that took the Dow from that first low of 536 to a high of
1001," Hays recalled, predicting that the Dow could post a similar percentage move from its recent levels.


It is clear that Hays is making a long-term call here The comparison to 1962 means that he is expecting the Dow to rise from 9200 to around 16500 in the next 4 years...

This can make or break Hays going forward. My gut says that he is wrong. No bear-market has ever ended at P/E levels that are higher than the TOPS of previous bull-markets! And keep in mind that even those earnings numbers have been tortured, massaged and doctored.

I also find that Hays' assertion that Abby Cohen has become "skittish", a little ridiculous. I mean, the woman has the S&P year-end target at 1500. Is that "skittish"?! Also, when commenting about VIX and Investors Intelligence surveys, he says he doesn't believe either is an "ironclad" indicator of sentiment. Yet, he leans so heavily on the Arms Index as an indicator! So, will this call, if it fails, sound the death-knell of the Arms Index?
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