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Mega Trends

December 17, 2012 – 6:09 pm

bull-and-bear2As an observer of stock markets it is clear that cycles and trends occur routinely. The long term trends are called Secular Bear and Secular Bull. The Great Depression started with the 1929 crash that set up the longest Secular Bear market that lasted 20 years. Then after that we had a 16 year bull phase followed by a 16 year bear phase leading up to another 18 year bull phase. That took us to the dot come bubble burst in 2000. We are still in the Secular Bear market from that event. We are nearing the end but that only means we have at least a year or two and maybe as long as five years before we get another Secular Bull market. I think the cause will be a resurgence of manufacturing in the U.S. primarily driven by cheap new energy being discovered today and the export of massive amounts of liquified natural gas that the U.S. is blessed with.

However, though long term this is good news for America and the Secular bull and bear market trends are well known, less well known is the same kinds of mega trends in interest rates. In the case of interest rates they move in the opposite direction of stock market trends. We are nearing the end of low interest rates just as we are nearing the end of the Secular Bear Market.

Take advantage of the trends but also understand it is impossible to determine the exact turning points. It is easy when looking back but very difficult in looking forward.

Good Trading
Steve Peasley

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