These high level maps are only useful a few times per decade – Here is the case I believe.
Interesting information:
(1) The 33-Year rally from 1933 to 1966 had the same speed than the 33-year rally from 1982 to 2015.
(2) The period 1995 to 2007 is a balloon over that “normal” trend.
(3) The DOW is currently in line with long term trends (against “normal” speed limits).
(4) The red line on this chart is climbing at 14% per annum – it is very likely to retain and is now 2% higher.
The 3 scenarios question:
1) Will DOW correct back within the large range 18,500/8,000? That would respect long term average progression.
2) Will DOW hug its resistance for many more months (Pain)? We could have had enough pain as is.
3) Is the liquidity induced inflation justifying another inflection point with exponential progress like what occurred in 1995? That would be exponential again.
My view:
- Locally the progress is capped 2% higher.
- I don’t think the market is about to move up vertically (even in 1995 and 1986, it had corrected for 1 year before to launch this type of attack).
- I acknowledge I am a bit too linear (using Ray Kurzweil wording), I think there is room for mean reversion.
Caution:
This log chart is to take with caution as the index is changing through time and the price is not inflation adjusted.
Interesting information:
(1) The 33-Year rally from 1933 to 1966 had the same speed than the 33-year rally from 1982 to 2015.
(2) The period 1995 to 2007 is a balloon over that “normal” trend.
(3) The DOW is currently in line with long term trends (against “normal” speed limits).
(4) The red line on this chart is climbing at 14% per annum – it is very likely to retain and is now 2% higher.
The 3 scenarios question:
1) Will DOW correct back within the large range 18,500/8,000? That would respect long term average progression.
2) Will DOW hug its resistance for many more months (Pain)? We could have had enough pain as is.
3) Is the liquidity induced inflation justifying another inflection point with exponential progress like what occurred in 1995? That would be exponential again.
My view:
- Locally the progress is capped 2% higher.
- I don’t think the market is about to move up vertically (even in 1995 and 1986, it had corrected for 1 year before to launch this type of attack).
- I acknowledge I am a bit too linear (using Ray Kurzweil wording), I think there is room for mean reversion.
Caution:
This log chart is to take with caution as the index is changing through time and the price is not inflation adjusted.
