4 April 2007

Stockmarket Cycles Current Observations

Stockmarket Cycles Current Observations: "The chart above shows the Japanese Nikkei 225 Index going back to 1984. Notice that the all-time high in the Nikkei index was registered in the last few days of 1989. This year, more than 17 years after the peak was reached, the Nikkei remains over 50% below its all-time high. Had you told someone in late 1989 that this index was about to reach a top which would mark a high in the Japanese market for more than 17 years, they would have attempted to have you committed. But as you can see, that is exactly what happened. Those of you who were around at the time may recall that virtually every financial expert in the world had taken turns in incorrectly predicting a top in the Nikkei, especially in the period from 1985 into 1989. And yet, all the experts who predicted an imminent top finally proved to be correct. Unfortunately, by the time they prove to be correct most of them had been convinced the magic of the Japanese economy justified the bubble-like prices that were crossing computer screens in late 1989.
There was a model, however, that can claim to have virtually pinpointed the top of the Japanese bubble and that model will be the main subject of this month's section on the Cycles.
Martin Armstrong is a controversial character to say the least. He is currently in prison for contempt of court charges. The amazing fact is he has been in prison for over seven years for contempt of court charges. We don't know if records are kept on the subject, but this must certainly be some sort of record for prison time on contempt of court charges. We are not going to go into the details of the charges against Armstrong because that is not the purpose of this newsletter. We have no idea whether he is guilty of the spectacular charges under which he was incarcerated in January 2000."

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