If You're Bullish: Time For A 70's Party Edition

Many traders have been following the 1974 analogy to the current market.  The Dow Industrials have traded in a remarkably similar pattern to the Dow in the 1973 - 1974 time period. 

According to the analogy, the market is now due for a major advance of 50% - 70%.  In the chart below, the current Dow Jones Industrial Average is pictured in blue, while the 1973 - 1974 Dow is a black line.

 

 Source: Bloomberg

The following chart is a closeup of the current market versus the market in 1974.  The comparison basically shows that the market should not make a new low.  In fact, it should begin a rather strong advance within the next several days, otherwise the overlay will disengage.  

 Source: Bloomberg

Comments

[Fred Voetsch]

I believe we have disengaged.

[raivo pommer-eesti.]

raivo pommer-www.google.ee
raimo1@hot.ee

Europe's largest bank, HSBC Holdings,

confirmed on Monday it was considering selling three of its major office buildings and said it
had received interest from potential buyers.

HSBC, which recently raised nearly $19 billion in a rights issue, said it may sell and lease-back office buildings in New York, Paris and London, including its headquarters at Canary Wharf.

London's Sunday Telegraph reported that HSBC was considering selling three of its biggest office buildings to raise 2.7 billion pounds ($3.98 billion).

"We are taking a look at the market, yes," spokesman David Hall said in Hong Kong.

"There are people interested in buying at an appropriate price," Hall said.

He declined to give further details.

HSBC bought back its building at Canary Wharf for 838 million pounds from ailing Spanish property firm Metrovacesa at the end of last year after the Spanish firm failed to refinance a loan secured on the building.

Globally, banks battered by the financial crisis have been looking to shed non-core assets in order to raise capital and improve their balance sheets.

"HSBC has just raised funds from a rights issue and the possible sale of offices could further boost its cash level and thus benefit the bank in its future acquisitions," said Alex Tang, head of research at Core Pacific-Yamaichi International.

The bank, which planned to shut most of its U.S. consumer lending business, said last month that it was ready for acquisitions in its traditional stronghold of Asia where many banks are pulling out to focus on core markets.

[raivo pommer-eesti.]

EU: Deutschland wieder Defizitsünder
Europa in der Rezession

Deutschland wird in der Wirtschaftskrise wieder zum Defizitsünder. Entgegen früherer Prognosen bricht Berlin schon im laufenden Jahr mit einer Neuverschuldung von 3,9 Prozent den Euro-Stabilitätspakt, wie die EU-Kommission am Montag in Brüssel vorhersagte.

Im kommenden Jahr drohen 5,9 Prozent Defizit vom Bruttoinlandsprodukt. Europa steckt mitten in der tiefsten Rezession seit dem Zweiten Weltkrieg. Das Heer der Arbeitslosen wächst. Ein leichter Hoffnungsschimmer zeichnet sich für 2010 ab.

Bundesfinanzminister Peer Steinbrück sagte in Brüssel zum europäischen Arbeitsmarkt: «Das macht mir Sorge.» Es sei kein Trost, dass die Lage in Deutschland wegen der Reformen der vergangenen Jahre besser aussehe. Laut Kommission werden 2009 und 2010 insgesamt 8,5 Millionen Jobs in der EU verschwinden. Die Arbeitslosenquote soll im kommenden Jahr im Eurogebiet auf 11,5 Prozent steigen nach 9,9 Prozent im laufenden Jahr. Deutschland schneidet mit 10,4 Prozent (2010) und 8,6 Prozent (2009) etwas besser ab.

[mlgreen8753]

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