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Thursday, October 20, 2011

An Interesting Parallel

There has been some talk recently comparing this pullback and the pullback in 1998. Some good posts on this have been by Doc Barter and Fearless and Volar. And I am also going to throw in an interesting observation made by HighRev that feeds into the comparison below. I decided to take a look and I was also struck by a large number of similarities.



So we are at a very interesting confirmation point right now. A break up of the small range at the top of the large range will be a very strong support of the comparison thesis.

Now I am sure that I will get a bunch of comments talking about my 'bias'/'loss of objectivity' like I had in this post: Revisiting the Large Count. But if you read this post in its entirety, you will understand where I am coming from.

I have pointed out a number of evidences in the past several months as to why the May top is likely not 'the' top. Yet am I not being permabullish. I am simply in no hurry to call the end of this cyclical bull market complete. And with all of the bearishness out there, my contrarian spidey-sense makes it seem like this whole mini-panic in Aug/Oct is a correction to be bought in the bigger scheme of things.
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