I couldn't help but notice how the magical TRIPLE that we've had in the stock market since the 2009 low was mirrored by a time in the not too distant past when there was a TRIPLE in the same 5 years time.
Granted - there are many differences in the fundamental backdrop, but given that we all want to educate ourselves on what markets can do based on what they have done in the past, this is at least a useful reference to see and to compare to the current rally.
The current advance has outlasted the 1982-1987 rally in time, but has lagged in price by a little.
I look at the near "linear advance" in the market as unusual. Tripling your money in 5 years is a tremendous return and given that the 300% advance has only been tested lightly a few times, there certainly could be a test to the market again in the near future. I offer this chart as educational value. How to implement a strategy off of this observation remains to be seen. You can see what happened back in 1987 though once the stops were getting triggered... it turned into a cascade of sell orders. That same condition could certainly emerge from here too.
Keep your helmets on tight. The going could get rough.
Tim Sun 11:49PM EST 9/21/2014 SPX 2010.40 last
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QuantitativeExhaustion
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Nice catch. Most agree it was a legislation piece brought to vote on a Friday afternoon that cause the panic drop in 1987.
timwest
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There were many very good reasons for it: The talk of legislation to eliminate the deductibility of interest on takeovers was certainly an important element, I completely agree.
QuantitativeExhaustion
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Well it seems you need all the elements accumulating at once, and this includes political head waters. I'm trying to think of something that is out there politically that might start the wheels turning and cause a drop like this.
QuantitativeExhaustion
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International tax rule updates to be agreed by G20 countries
Some of the largest multinational companies to be forced to contribute towards government budgets
Bold updates to international tax rules designed to force some of the world's biggest multinationals – including Google, Apple, Amazon, Vodafone and GlaxoSmithKline – to contribute their fair share towards government budgets are to be agreed by G20 countries this weekend.
Under draft rules published on Tuesday by TAX EXPERTS from the Organisation for Economic Cooperation and Development (OECD) many of the world's largest and best known corporations face being forced to rapidly dismantle their elaborate cross-border corporate structures.
The moves by governments to corral companies back into a joined-up, modernised network of international tax treaties mark the halfway point in a two-year reform project begun by world leaders in Moscow last summer.
If nerves hold among the 44 countries involved – which together represent 90% of the world's economy – the impact on corporate profits and treasury receipts could be significant in many economies, large and small.
Meanwhile, countries that have courted multinationals with tax-friendly regimes – Bermuda, Ireland and Luxembourg among them – could suffer an investment exodus.
Existing international tax rules, laid down in a network of about 3,000 bilateral tax treaties, have for decades been straining to keep up with innovations in technology and tax avoidance. The OECD has said the G20 reform project is urgently required "to prevent the existing consensus-based international tax framework from unravelling".
Among the initiatives OECD experts claim will have the most impact are new rules to stop companies exploiting differences between tax regimes to conjure up unwarranted tax deductions.
These so-called hybrid mismatch structures are thought to leak billions from treasury coffers around the world each year and are routinely deployed by the world's largest international businesses.
timwest
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That's big news indeed. That's a significant similarity to the precursor to the 1987 crash.
QuantitativeExhaustion
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I agree
QuantitativeExhaustion
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When will this start to sink in?
timwest
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I'll be watching very closely. This is a big story.
QuantitativeExhaustion
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The untold story. Barley any updates on this over the weekend.