re: Faber and "time frames"
While Faber is talking in the context of a "45 to 60 year cycle" (hardly the timeframe germane to most SI traders) -- a call for a 30% correction by any other name -- is still a call for a 30% correction...
I think Faber's most thought provoking comment in the article is this:
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Faber quote:
["Having said that, if one looks at the last bull market in commodities from 1970-1980; then in 1973, sugar, wheat and corn peaked and thereafter they never hit a new high.
So one can have in commodity markets, like in stock markets, different groups peaking out at different times.
"And it would not surprise me if some industrial commodities have not made a major high and may not make a new high in the near future or ever again in this cycle."
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When did SI start ?
1996-1997?
Once again, here's a reminder of how the commodity bull runs have played out over the last few years:
ie: "All speculations end the same -- always have... always will."
For the OSX:
OSX 135 to 45 -- May thru August 1998
A collapse of 90 index points for a - 67% loss in 3 months:
stockcharts.com[l,a]dbclynay[d19980512,19980902][pf][iut]&pr....
OSX 135 to 58 -- June thru Sept 2001 – the now infamous “June Swoon” of 2001: A collapse of 77 index points for a loss of -57% with the majority of it in less than 30 days:
stockcharts.com[l,a]dbclynay[d20010520,20010927][pf][iut]&pr....
OSX 115 to 78 -- May thru July 2002
A collapse of 37 points for a 33% loss in 9 weeks:
stockcharts.com[l,a]dbclynay[d20020514,20020715][pf][iut]&pr....
For the XNG – Natural Gas E&P Index:
XNG 260 to 160 – May thru Sept 2001
A collapse in the Natural Gas E&P stock index of 100 points for a -40% loss:
stockcharts.com[l,a]dbclynay[d20010515,20010926][pf][iut]&pr....
…but, that was just the first wave in the Nat Gas collapse --- here was the 2nd wave:
XNG 205 to 105 -- May thru July 2002
A collapse of another 100 index points for a 50% loss in 7-8 weeks:
stockcharts.com[l,a]dbclynay[d20020419,20020725][pf][iut]&pr....
Even the newest generation of goldbugs who weren't in the market during the 1980 Gold & Silver "bubble" have selective memories too:
This recent rollercoaster ride of death, destruction and despair...culminated with a near 100 point HUI death march resulting in an alltime low sentiment reading amongst goldbugs as recorded by Hulberts digest and the final goldbug capitulation in May 2005:
stockcharts.com[d,a]daclynay[d20030919,20050919][pf][iut]&style=
In both 2004 and 2005 the HUI Goldbugs Index brought brutal, near 100 point index shakeouts...here's the first. about a 40% collapse from the HUI 240's to the 160's in only 20-some odd trading days:
stockcharts.com.
...and we know the story of the bone-laden HUI deathmarch of 2005 as well:
stockcharts.com.
And once again vis a vis the question as to whether commodities have entered a speculative phase, an acutal bubble, or are merely being repriced in a new paradigm multi-year cycle based upon the emergence of China.
Was this representative of a new paradigm multi-year upcycle, or a speculative bubble ?
stockcharts.com[l,a]dbclynay[d20051211,20060211][pf][iut][J69380818,Y]&a...
Are 50% corrections, or rallies in mere days, or weeks in major commodities reflective of stability and sanity; or speculative bubbles?
Yes... that too -- should be a rhetorical question...but, to many -- it won't be.
-- It's not about China, India/BRIC.
-- It's not about demand, or supply.
-- It's about human emotion, psychology and behavior.
SOTB |
