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John P. Hussman 30 Jan 19
S&P 500 is now just 8.5% below the most extreme level in history, with internals still divergent (though we're open to shifts). Valuations still rival the 2000 and 1929 extremes here, on measures better correlated with subsequent returns than Shiller PE or price/forward earnings.
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Rene Dittrich 30 Jan 19
Replying to @hussmanjp
I understand your long term forecast John but very surprised that your internals never seem to catch these rallies.
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John P. Hussman 30 Jan 19
Replying to @renditt
Our measures of internal uniformity shifted negative on Feb 2, 2018 and broadly indicate speculation vs risk-aversion. On average, shifts persist about 30 weeks. About 25% run 40 weeks or more, about 25% 7 weeks or less. Haven't found any benefit from making shifts more frequent.
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ajk 30 Jan 19
Replying to @hussmanjp @renditt
Do you see parallels to January 2001 and January 2008? This rally feels very similar albeit slightly larger. Those were also inspired by Fed easing.
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John P. Hussman
Bingo. Faced with early bear market weakness, the Fed's first impulse is typically to stage an about-face to appease investors. When valuations are extreme and market internals are ragged, the accompanying "clearing rallies" can be fast and furious, but also prone to failure.
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Rob Angold 31 Jan 19
Thank you for all you do and share, John! I “feel” that DEC 2018 mimicked the bottom we hit in MAR 2008 which was followed by “sucking” folks in the next two months... I would not want to be “long” in this market after FEB 2019 to be on safe side!! 👍🏻
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Rob Angold 31 Jan 19
However, I can see them extending this bear market rally until APR 2019... Don’t get fooled!
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