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Based on data going back 90 years, whenever the 12-month rate of change (ROC) in the Dow Jones Industrials Average has exceeded 40 percent, it has generally signaled trouble ahead.
In three cases, a 12-month ROC above that level has only marked a short-term pause, after which the market traded higher.
But on 11 other occasions, similarly rapid advances have been followed by notable corrections, including the collapses that followed the 1929 and dot-com era peaks, as well as the 1987 crash.
Given those odds, increasingly exuberant bulls might want to have a rethink.
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I subscribe to the FFT newsletter at http://www.forecastfortomorrow.com that guy is calling for a bigger event to come in the next few months. If you look back he has been spot on with things over many years, and someone that should be listened too!
IMHO this greece debt thing and commercial real estate thing could be the next thing to blow up in the US governments face. Time will tell.
Thanks for the heads up. http://paynecapital.blogspot.com
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