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.

Dow today vs 1974  

 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.  

Dow today vs 1974 closeup

 Source: Bloomberg

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8 thoughts on “If You’re Bullish: Time For A 70’s Party Edition”

  1. raivo pommer-www.google.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.

  2. 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.

  3. Investing is one of the smartest things a person, young or old, can do with their money. Times are always uncertain, but especially now during this time of recession. Some of my investments include real estate, online business, and my latest is an investment in the stock market. I am watching Mentor Capital (MNTR.PK). A report released at http://breastcancerinvesting.com/investor_call.shtml turned me on to the company.

  4. Hi Kally,I wondered what that form was all about, as I’ve never heard of my aetchers having to deal with that. I think the issue there is that Lloyd’s here sets up an offshore account, which does involve some hoop-jumping but means you will have a British account offshore meaning, not with the local Lloyds branches in London. So, when you went to Lloyds in London they had no way to help you except to set you up with one of their accounts, which yes meant you needed a contract and I would think a lease on a flat (which is the normal approach of banks in the UK).So, all of this is to say, your experience is exactly why it’s easier to get an offshore account from here, and if you don’t have a way to say that you make 50 000 pounds (ie a job that pays you that much, or parents/partner to co-sign your account which is what our aetchers do) then you’re in a jam. Or you could go to HSBC and get their passport account which is a bit more costly, but one of our readers above was really happy with them.Thanks for sharing all of your experiences with us. It helps everyone who will go through their move own to the UK see all of the issues surrounding bank accounts, and why it’s so important to sort them quickly.Good luck with everything else!

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