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Letter 1555

December 31, 2014

 

I’ve never seen a major bull market that did not end with a wild and wooly speculative third phase. I saw this in the bull market that started in 1949, when the final phases of that bull market shocked traders as the Dow surged into the 600s. We saw this in the 1970s global market when gold ended a final phase and tapped out at a price of $850. We’ve seen the great correction in 2008-2009 which tends to end the second phase of every bull market. The public is still gloomy and many have given up on investing and stocks.

 

For new subscribers, bull markets consist of three psychological phases. The first phase is the accumulation of stocks, as they drift off the bottom of the last bear market. The second and longest phase occurs as the public gradually follows the smart money back into the stock market. Following ... Log in or subscribe to continue reading.


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