4 thoughts on “A Chart is Worth a Thousand Words

  1. A chart may be worth a thousand words, but you have not offered any conclusions here.

    The chart can be interpreted to mean that the rally still has another 50% to go….

    ….or it could mean that a downturn and another 40% fall is imminent.

    So which is it?

  2. “So which is it?”

    Given that there is no evidence that market timing can be used effectively (except perhaps by a few particularly good and particularly disciplined trend followers), I have no idea. As Keynes is said to have put it, the market can stay irrational longer than one can stay solvent.

    That said, the idea that longer-term price movements *can* be exploited has much more promise. It was on that basis that I expected markets to turn negative this year (click on “Publications” and review my 2011 Investment Outlook for details) and that I doubt that the current secular bear market will end anytime soon. I am not sanguine about the markets, about the economy or about our political situation.

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