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Pragmatic Capitalism

Practical Views on Money & Finance

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Stealth Bubble

A subscriber writes: Hello Carl. As a long-time subscriber (going back more than 10 years), I have a lot of respect for your historical P/E charts. However, when you recently wrote that stocks are high but not in a bubble, I’m wondering if perhaps you are not considering the stealth bubble discussed by John Hussman. (Click here to read Hussman article.)

A Long-Term Look at the Nikkei

The Tokyo Nikkei Average has been in another free-fall since the top in May, falling -22%. Before we get to the long-term chart, let’s look at the one-year daily bar chart.

Are Interest Rates Turning Up?

Based upon very long-term charts and commentary from Hoisington Investment Management Company, for some time we have speculated that the 30-year bond rate would continue downward to around 2%. However, the charts are showing strong technical evidence that interest rates may be turning up in the long term.

Gold – Resuming a Long-Term Uptrend?

On the weekly chart below, we can see that, after making a new, all-time high back in August of 2011, gold went into a correction/consolidation mode, ultimately forming a descending triangle. While this formation suggests lower prices (the flat line is the weakest), price broke up through the top of the triangle. After a breakout the technical expectation is for price to pull back toward the line, which it did enthusiastically.

6 Month Seasonality Turns Favorable

By Carl Swenlin, Decision Point We have just begun a new six-month period of favorable seasonality. Research published by Yale Hirsch in the Trader’s Almanac shows that the market year is broken into two six-month seasonality periods. From May 1 through October 31 is seasonally unfavorable, and the market most often finishes lower than it… Read More