Tuesday, October 26, 2010

Long Wave

Many of you are familiar with the Kondratieff or Long Wave. It is based on an economic cycle of roughly 50-60 years.

Here is an observation from Eric Von Baranov of the Kondratyev Theory Letters (yes, there are as many spellings of this as there are for Khadafi).

Classic Long Wave theory has assumed a liberal bias during the Upgrade and a conservative bias during the down grade.  While simplistic these trends tend to hold true.  Certainly Obama is more liberal than Bush II.  Yet Obama is taking heat from the liberals in his party for not pursuing Gay and other liberal issues. 

Interesting stuff. What it suggests is that we are in an up-wave now coming off the depression low.


Prince Jackrabbit said...

Michael, I have never written before, but after reading months of bearish comments on this blog, I am glad to see you have turned bullish - that's two bullish blogs in a week!

So many of us knew things were getting better and all the bearishness we saw everywhere was simply good for the market. I have started using this blog as a contrary indicator. Recall the last survey you had on this site - and you even wondered what the "correction crowd" was thinking. Well, now you know.

I feel sorry for the head and shoulders crowd, the 40-week cycle crowd, the never-has-bullish-sentiment-been-so-high crowd, and the rubber band theory crowd. The fact is, depending on which way the wind blows you can always find a technical indicator to support the theory.

Enjoy the fall (I mean the season) and enjoy the rise in markets. Even if there would be a correction in November, it should be short lived and not very severe.

Quick Takes Pro said...


So if I am a contrary indicator then you should be selling? :-)

Once again, the technicals got steamrolled by the Fed and its firehose of liquidity (Ritholtz). Liquidity = higher stock prices but then again so does a greenback going to hell in a handbasket (see negative yield on TIPS).

Please come back to comment on the market after the election (or every day, if you like). I mean that seriously and sincerely.

Prince Jackrabbit said...

Nah, I wouldn't be selling now since you are just ramping up your bullish sentiment :-) This has a ways to go. Due to the change in your view and the fact that the normal crowd that agrees with your bearish sentiment is absent from the comments section, this might be the time to "hold".

BTW, why do you bury comments with opposing points (especially with fundamentals to support their argument) with newer posts in rapid succession? I've seen you do this in the past as well. CBIS - a penny stock. Really Michael, you took the time to post this as your second post today? ;-)

Interesting to see you claim you allow any opposing view and then adopt a tactic to bury the comments. Any way, I am not against technicals, but use it only as an adjunct.