Friday, December 30, 2005

The Decennial Pattern is Broken

The trading year of 2005 is over, and the bulls lost.

When entering this year, the bulls were counting on many winds blowing in their favor, not the least of which is the famed decennial pattern. For one hundred years, the bulls have had this at their side. Well, it didn't work this time. And I believe this represents the shape of things to come.

Below is a graph showing the percentage performance of the three major stock market indices this year. The Dow (which, importantly, had a loss for the year) is shown in black. The NASDAQ Composite is shown in blue, and the S&P 500 is shown in green. As you can see, even the strongest of these indices produced a return even more meager than what a risk-free CD at a bank would give you.

Regular readers of my blog know where I stand, so I won't belabor the point. I'm looking forward to 2006 as a year when the market really starts to fall to pieces. There will be tremendous trading opportunities all around.

I've enjoyed writing this throughout the year - - it seems like ages ago, but I only started in April - - and I'm looking forward to sharing my (sometimes overly opinionated) opinions with you in 2006. Happy New Year to one and all!

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