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Grizzly's Growlings Current Report

Monday Morning Market Musings    05/10/99

Are We There Yet?

NOTE: Please welcome a new feature at bearmarketcentral.com, the Chart of the Week. Each week, we’ll bring you a look at the provocative research of James Stack, head of InvesTech Research. Jim brings you his in-depth analysis of the markets and the economy "far from the maddening crowd" in beautiful Whitefish, Montana. Jim's "off-Wall Street" perspective yields some of the most valuable insights available anywhere on the planet. Check out www.investech.com for more information on InvesTech Research and their newsletters or just check our Chart of the Week section for each week's highlights.

You know the scene: little Bobby, sister Katie and Bowser the family pooch are sitting in the back seat of the family SUV as they head out on their long-awaited summer vacation. Bobby and Katie are filled with visions of the vacation: the amusement park, the beach, hot dogs, ice cream and much more.

"How long is it going to take to get there, Daddy?" piped up young Bobby.

"It’s going to be a very long trip," replied his father. "Why don’t you just sit back, relax and enjoy the ride. I’ll tell you when we get there."

Like most eight-year-olds, Bobby wasn’t satisfied with that answer. He quickly became restless and irritable. About an hour into the trip, and every hour thereafter, he asked, "Are we there yet, huh, are we there yet?"

So has it been for us bears with the stock market, since 1982. Every potential top, even that preceding the Great Crash of 1987, has been rebuffed with "No, we’re not there yet."

Indeed, Grizzly & Co. went out on the "we’re there" limb last July. (See The Fat Lady is Singing.) Alas, we were a bit too anxious to get to our destination. It was just a stop for minor repairs on the road to DJIA 11,000. Since the market lows of last October, the DJIA is now up a remarkable 3,500 points, more than 46%.

Yet the song from the back seat remains the same: "Are we there yet, huh, are we there yet?" And we continue with our ongoing answer for US stocks:

FULL CRASH ALERT!

A. J. (Jack) Frost passed away last week. No, not the rebellious roustabout who helped Bruce Willis save the world in last year’s blockbuster movie Armageddon. This A.J. Frost was co-author, with Robert Prechter, of the landmark book Elliott Wave Principle -- Key to Market Behavior.

Frost was one of Canada’s most successful and respected investment analysts. It was Frost who received the Elliott Wave "torch’ from Hamilton Bolton, who earlier took the hand-off from Charles J. Collins, who in the 1930's helped provide a forum for Ralph Nelson Elliott to develop and promulgate his revolutionary findings on the markets.

The heir to the Elliott Wave legacy is Frost’s co-author Robert Prechter. Prechter runs one of the largest independent investment research firms in the world, Elliott Wave International. Check out http://www.elliottwave.com for a wealth of information on investing using the Elliott Wave Principle. And please visit their memorial to A.J. Frost. [Wouldn’t it be appropriate for A.J. Frost’s death to mark THE peak of the greatest bull market in recorded history? ]

Elliott Wave Principle, now in its seventh edition, is a must read for all investors and traders. In a nutshell, the Wave Principle states that the financial markets are inextricably intertwined with humanity and the natural cycles of growth and decay, fear and greed, optimism and pessimism, and of mania and panic. These actions and reactions express themselves in the financial markets as a set of repeatable patterns, based on five waves up followed by three waves down. See an excellent Introduction to the Elliott Wave Principle to learn much more.

Random bits:

  • The bombing of Yugoslavia continues for a sixth week, with negligible results. With the tragic accidental bombing of the Chinese embassy in Belgrade, it has become a world war. We can only pray that it will not become a World War.
  • The stock markets are not the only thing breaking records these days. The devastating tornadoes that ripped through Oklahoma and the Midwest last week were among the most powerful every recorded. The 318 mile per hour winds killed 44 people and left another 15,000 homeless.  Your local Red Cross chapter is collecting goods and money to aid the victims. They would love to hear from you.
  • In another sign of disastrous changes in the weather, more than 160 people died last week in a scorching heatwave in India. Temperatures soared to 118 degrees Fahrenheit (48 degrees Centigrade), unprecedented for early spring.

How hot will things get this summer on Wall St.? If the long-awaited Bear does [finally] begin, it will be "unbearably" hot. Stay tuned!

"A change in the weather is sufficient to recreate the world and ourselves."

Marcel Proust (1871–1922), French novelist.
Remembrance of Things Past, vol. 6,

 

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