Tuesday, December 28, 2010
Check out the price action in the left corner ( this is a log scale chart) which is the time frame from 1900-10. So far 100 years later we have made almost exactly the same price swings only its all 1 year later hence we should get a 25% downswing in 2011 which is very likely from many angles. Especially now as the bond markets have entered a major downtrend and very soon trigger a sell of in stocks as well as I had written about a few times. The scary part is rather the yearly MACD and the fact that now major downturn ever ended without hitting a PE level of 7 - the low of 2009 was around 14. Still the parallel to the last century is very intriguing but the overall situation is much worse as the whole world s about to be bankrupt never before in modern civilization so much debt has been accumulated not accounting for the liabilities in the social security systems which are even worse. As soon as the baby boomers hit retirement age in about 10 years the countries will be broke officially.
Posted by getagrip at 6:19 PM