Bear Markets

[halfwheel]

Just about every bull market in history has been different in some way to other bull markets. The same can be said for bear markets. However, the bigger the party then usually the bigger the hangover.

Suffice to say that the warning signs were there for all them way before the bubbles burst. What sort of warning signs??

-Extreme Optimism(95% of punters convinced trend will continue)
-Complacency
-This time it's different
-Market Thins out coming into a top
-Price Patterns/Cycle tops

Now none of these can tell you the exact top( unless all the patterns are falling in place at the right time and look really convincing which is really rare), but they give a fair idea.

ATM, there is a whole new breed of trader that has no idea of what happened back in 1987 and there are so many derivatives to trade the markets that no one really knows what these things are actually worth. One thing I am relatively sure of is that there is something looming on the horizon that is going to scare the pants off nearly all investors, including me!!

Cheers

Dont bull markets last longer than this? Isnt the overall economy strong and P/E on shares relatively low

 

[wavepicker]

Dont bull markets last longer than this? Isnt the overall economy strong and P/E on shares relatively low

There are various degrees of trend at play in the market. Essentially we have been in a bull market since the early 1980's??? Although this current leg started in March 2003.

As for the economy being strong, there is no doubt about that it . But does that guarrantee the market will stay bullish?? Absolutely not. If anything, the movements in the market precede what the economy does. For instance, take the Crash of 29, it preceded the Great Depression and the crash of the Nikkei in 1990, it preceded a deflationary depression in Japan.

Cheers