podcast last month, former BT fund manager Olev Rahn told a brilliant storyRahn and his BT colleagues – including Jillian Broadbent Chris Corrigan, Rob Ferguson and Kerr Neilson – had grown increasingly sceptical about the multi-year rally on that had sent the ASX up 100 per cent and the S&P 500 up about 60 per cent, and had taken protection against a correction using futures and options.
It took 719 sessions for the index to rise from 4000 to 5000, according to Bloomberg, while the rally since the end of October which, at 22 per cent, is now firmly in bull market territory, has added a stunning $US9 trillion has been added to the value of US stock values over that time – that’s more than the entire value of China’s market.
LPL says that since 1968, the last nine times the broader index reached a new milestone like this it was positive a year later almost 80 per cent of the time, and higher by an average of 10.4 per cent. But 1987 and 2014 are recent exceptions. Still, several of Bank of America’s market indicators are starting to flash yellow. The bank’s bull-and-bear indicator, which correctly screamed ‘buy’ last October, rose to 6.8 this week; a reading above 8 means it’s time to sell.So in summary, all of the above says it’s clear as mud where the market goes next.
Source: Loan Digest (loandigest.net)