The Real Bond King, Yves Lamoureux, in this video expects a final run up for stocks, in an epic Wave 5 (of 5 of 5): a big wave up that is driven by an increasingly narrow set of leadership stocks, and fueled by a narrowing number of inverstors as most will sit this out. Yves see this as a rotation out of bonds and into other asset classes. The bond market is 10x larger than stocks, so a small distribution from bonds can have a big impact on stocks. Timing: after the current wave 4 correction runs its course. This is similar to the Yelnick View that a final thrust will take us back to the S&P 1550-1600 range, forming a dramatic triple top with 2000 and 2007.
Good post. My cycles work is suggesting a stagflationary shock beginning sometime in the next 2 years. This could be proceeded with your final stock run-up, ending as upward pressure on interest rates and commodities prices begins weighing on stocks.
Posted by: rzero | Tuesday, December 11, 2012 at 12:26 PM
"preceded" rather
Posted by: rzero | Tuesday, December 11, 2012 at 01:39 PM