Stock Market Analysis from HRA Advisories

I am not a "bull" when it comes to the stock market, even if I am still about 80% long (down from 90% a few weeks ago). I don't think this is a new bull market, I don't buy any of those "green shoots" that certain network TV (one that GE owns, for one) has been breathlessly talking about for the past 6 months.

But I found this commentary at Kitco's website. I thought I may share it.

Time to cash in? (September 2009, HRA Advisories)

The article title doesn't quite reflect the content, though. The authors are saying there are tons of trading opportunities in a current secular bear market, which they agree started in 2000 and we are probably half-way through it.

"We looked at the S&P during the last secular bear in the 1970’s for some insight on how far a bear market rally can go. The S&P chart for this period appears on the following page. As you can see the market basically “went nowhere” from 1968 to 1982, but that flat period included sustained rallies of 55%, 60% and 80%. A more recent example is the rally that occurred from 2003 to 2007. Bear market rally it may have been, but a 4-year 90% rally leaves room for a lot of profitable trading. One could refuse to trade during secular bear markets, that’s an individual choice, but it’s hard to make money sitting on the sidelines for 18 years.

"We’ve seen new bearish lectures about how the market has again gone nowhere for 15 years. True, if you do a straight line point to point measurement using carefully selected dates, but not very meaningful or useful."