A key message for participants of equity markets is to be very careful in applying old paradigms of technical trading definitions of bull and bear markets to the brave new world we are entering. Technically trade equity markets in monetary lose periods is a very different game and must take into account the increasing issuance of paper credit.. cyclical bulls and bears will pass by with astounding frequency. Many professional technical traders, as well as black box historically based systems, will get eaten alive.

Here a table of mexico during her monetary lose period of the 80s.. note the technical impossibility of  technically ‘trading’ the mexican markets during this period! Unless you are very adept at technical trading and unless you have plenty of time for such things buy on sell offs and hold to preserve and even grow capital. FX issues are key for obvious reasons.. ie borrow in the depreciating currency.. Below a chart of the mexican stock market during the 80s as contained in Dr Faber’s presentation to the Mises Institute 2010. With thanks to Marc Faber for the slide. Rich

1 Star2 Stars3 Stars4 Stars5 Stars (2 votes, average: 5.00 out of 5)
Loading...