Public vs Capital Perceptions

Recently headline rhetoric predicted that extreme bullish sentiment readings in late 2010/early 2011 were foreshadowing an equity market crash.

Sentiment Survey:


The only thing that's crashed is extreme bullish sentiment.

The stock market in response to endless QE(n) remains entrenched within sharp secular down trend in real terms. The "crash" in real prices, nevertheless, continues to elude headline analysis.

The public, driven by headline analysis, sees only nominal trend. Unforunately, they have no idea what's driving it.

Devaluation Steps: S&P 500 Total Market Return and Inverse price of Gold


Capital sees the true secular trend.

U.S. Large Cap Stocks Capital Appreciation Index (LCSCAI); S&P 500 to Gold Ratio and Z Scores from Primary Trend (48 Month)


Source: aaii.com