Is The US Market About To Go “Mega-Bearish”?
June 6, 2011
It’s been awhile since we’ve looked in on this chart from Doug Short, but with the US market and economy looking wobbly again, it only seems wise.
It shows the current market up against two previous mega-bears (1929 and the great Nikkei bust), and as you can see — going back to the peak in 2000 — we’re somewhat, though obviously not precisely, in line with the others.
No doubt the current market rebound (ours is in blue) has well surpassed equivalent bounces from previous busts.
But suddenly the end of stimulus is looking at us square in the ey, and that’s worrisome because of this chart, which we’ve run before.
You need to enlarge it (click here) to see what’s going on, but basically the Nikkei — post bust — has lived or died based on stimulus measures, and has generally fallen in the absence of them.
Given that, yes, we are, in a balance sheet recession marked by ongoing deleveraging, this chart — and the Japanese experience as a whole — remains quite relevant.
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