In this weekend's 359th edition of Turning Points we have a an 11 page note discussing exactly where we are in the current long-term secular bull market cycle, how previous secular bull and bear markets tell us what to expect with the current run, and how to best invest for what is ahead.
What follows is a brief preview from this weekend's note:
Scenario 2 is coming to pass.
This means that given the fact that an anomalous decline occurred in 2022 during a liquidity filled monetary environment as we approach the middle stages of a secular bull market, the makeup trade that occurs is going to be formidable, to say the least.
Everything is at the markets back from here:
- We have the middle stage (acceleration stage) of a secular bull.
- We have a deceptive enough decline that nearly everyone got shaken out.
- We have rampant liquidity remaining in the economic system looking for a home.
- We have all-time highs in the major indices that are yet to be exceeded, acting as both a a point of attraction and upside catapult once they are exceeded.
- We have psychology that has completely shifted from where it was 18 months ago at the market peak.
- We have a Fed with an ever diminishing role in the market.
- We have an anomalous decline in 2022 that the markets will violently makeup for.
- We have a theme in AI that will function as the fundamental narrative to drive prices.
The fact that we have the AI revolution occurring as we enter the middle stages of the secular bull market also lines up well with the psychology as we entered the middle stages of the 1982-2000 secular bull market, with the internet boom occurring during the middle to late stages.
Whether technological revolutions occurring as price begins to truly heat up is a symptom of speculation or a feature of the cycle at work is up for debate.
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