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Strebler's Perspective

October, 2017

Global Economic Uptrend

by Jon S. Strebler 

 

One analyst made the claim last week that we are currently experiencing “the first synchronized global economic uptrend ever". Now, you may have heard that “ever” is a really long time, and as a naturally curious person, I therefore have to wonder if this claim is correct. Unfortunately, there are practical limits to tracing back the history of economic growth worldwide. For example, I’m not going to try to look at how Babylon’s economy meshed with pre-Incan prosperity, the Myceanean age, the Kush kingdom, the Shang dynasty, or standards of living during India’s Vedic period.  

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Melt-Up?

by Jon S. Strebler 

 

“A market that repeatedly refuses to go down wants to go much higher.” – Anonymous

 

I can’t find the exact quote, but there is an old stock market adage something like that.  And whatever the exact wording, it reminds me of the US stock market over the last 11 months, or even longer.  In these columns, we have documented the many ways that stocks are overvalued and overdue for a correction; we have identified the many risks and calamities that normally might have made stock prices tumble; we have cautioned readers, as is our fiduciary responsibility, to therefore not be too heavily invested in a market that could reasonably falter in a big way at any time.  And yet prices refuse to go down by any appreciable amount.   

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Whipsaws

by Jon S. Strebler

Last week's DTL writings featured some interesting thoughts on technical analysis, which is a robust basis for our thoughts and recommendations about various markets. As mentioned from time to time, technical analysis, or reading the charts in order to determine trends and predict trend changes, works on the principle of probabilities. We know that historically, certain chart patterns provide profitable investment opportunities X percentage of the time, be it 55%, 70%, 85%, or whatever. The idea is to buy and sell in accordance with those patterns and probabilities, knowing that they won't always work out as advertised. Ideally, we identify rather quickly when things aren't working our way, and get out with a relatively small loss, counting on the winners to more than compensate for those losses

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