No one rings a bell to announce the top of the market. Recent downside action in the major indices is explained by the pundits to be a direct result of the FED aggressively raising interest rates. Balderdash! The FED is only accelerating a topping out process that started long ago. The Top Out Parade on Wall Street is now into its third year. Here are the dates:
- Daily new highs on the NYSE topped out on October 3, 1997;
- The advance-decline ratio topped out on April 3, 1998;
- The D-J Transportation Average topped out on May 12, 1999;
- The NYSE Financial Average topped out on May 13, 1999;
- The D-J Utility Average topped out on June 16, 1999;
- The Value Line (geometric) topped out on July 6, 1999;
- The NYSE Composite topped out on July 16, 1999;
- The D-J Industrial Average topped out on January 14, 2000;
- The Russell 2000 topped out on March 9, 2000;
- The Nasdaq topped out on March 10, 2000;
- The Amex Index topped out March 23, 2000;
- The S&P topped out on March 24, 2000.
The stellar performance of a handful of large cap stocks has masked the terrible performance of the majority of stocks. There will be many rallies in the future but the indices are unlikely to exceed old highs for many years.
The rallying cry "Buy the Dips" will soon change to "Sell the Blips".
For a graphic view of the mania, visit Cross-Currents.net