Exceptional Practical Observations from 'Unsophisticated’ Trend Follower

John, a self-proclaimed non-sophisticated market follower, makes some exceptional practical observations that tend to elude the "sophisticated" crowd.

The Dow 1,000 theory based on the assumption that deflation is inevitable in the US fails not only to observe the general trends but also the difference between 1929-1945 and 2000-2016.

The “Long-term Chop within a Box” is consistent with periods of devaluation.

Large Cap Stocks Total Return Index (LCSTRI, S&P 500) and Z Scores from LCSTRI Primary Trend (48 Month)


In my commentary Be wary of worst case scenarios, I suggested The anticipation of another sharp drop (Dow 1,000 thesis) based on the assumption that 2000-2016 is nothing more than a repeat of 1929-1945 fails to understand that these two periods, while showing cyclical similarities, are not comparable.

Eric,

I’m not a sophisticated market follower. But some of the recent noise from commentators predicting Dow Jones crash to 1,000 caught my attention. Seems to me, the chances of Dow to 1,000 are as likely as a gallon of gas going to $1.00 or a loaf of bread to 75 cents or a candy bar to 25 cents etc etc. For that matter, a barrel of crude oil would need to go to $30 etc. I agree with the devaluation concept. The “Dow to 1,000” guys seem real foolish. Now I’m thinking that gold is simply the last thing to catch up and rise due to devaluation of $USD. Everything else over the past 25 years has gone up in price, gold a once-hated relic is just the last thing to catch up and it probably has more to go. Dow will gyrate in a range. Just my random thoughts.

Great job with your website. I appreciate your views.

John

Thanks John!