Just for fun - look at the chart below and picture in your mind that price followed the red-line from 1997-2002.
Chart courtesy of Stockcharts.com
Assume price made a nice neat correction in 1997 until near the top in 2000. Assume then that price rose in an orderly fashion into 2002 and continued along the real path from there. Wouldn’t market perceptions be totally different? I saw someone on TV complain that price was exactly were it was ten years ago. So what?
If you look at the “problem” as that we were too good before, (as opposed to too bad now), everything changes mentally. But the truth is that we are where we are and it does not matter how we got here.
I’m not saying that the problems we have now would not be here today if we had followed the red path. I’m saying we would “think” things were better because price was following a recognizable trendline. Well, hello… it is following that same trendline now but people want to call it a bear market. If it had followed the red path the CNBC technicians would be saying we were in a normal correction after a 25 year run.
Again… hello… price is in the exact same place either way.
Post Modified: July 15th, 2008 at 11:29 pm
Tags: Sentiment · Standard and Poor's 500 (S&P500)No Comments
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