Saturday , 13 July 2024

The Bull Market In Equities is NOT Over! Here's Why

So says Simit Patel ( in edited excerpts from an article* which Lorimer Wilson, editor of has further edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Patel goes on to say, in part:

I [have] already shared my technical view, in which I expect SPY to reach 182 by 2014, but here’s a recap of the four fundamental reasons I think the bull market in equities that has kicked off 2012 is far from over:

1. The Weakness of the Bond Market

I think the weakness of the bond market is a major driving factor. It is not so much that equities are such a great opportunity as it is that money has to go somewhere — and bonds do not look like the right answer. This may be a question bears should spend more time considering: if not stocks, then where?…Some will go to gold, some will go to fine art, some will be in cash…but, when all the options are considered, I believe more is due to be allocated to stocks simply because the size of the bond market and its current weakness are driving factors.

2. The Continued Growth in Money Supply

Money supply continues to reach all-time highs, with the most recent numbers (from March 5 at the time of this writing) putting MZM past 10.8 trillion… – and all this money has to go somewhere.

Home Delivery Available! If you enjoy this site and would like to have every article posted on (approx. 3 per day of the most informative articles available) sent automatically to you then go HERE and sign up to receive Your Daily Intelligence Report. We provide an easy “unsubscribe” feature should you decide to opt out at any time.

3. Most Stocks Have Not Yet Posted New Highs

Although 2012 has gotten off to a strong start in Q1, let us not forget that last year was not a bull year. As a result, we’re not seeing many stocks post new highs; John Gray of Investors Intelligence notes that less than 200 stocks are at a 52 week highs, and that the number will more likely be at least 500 or more when a real market top has arrived. I tend to agree with this conclusion and think it is a very important point.

4. Chinese Credit Growth 

Last, but certainly not least, is China: fears of a slowdown in China are rampant, but China did recently announce its intention to bolster credit growth — a move that sent Chinese stocks listed in the US higher. This reinforces the other points in this article, in that credit growth will result in an expansion of China’s money supply and will also make investments in risk easier to finance.

Why the Divergent Opinions?

I believe part of the confusion is that the U.S. economy is still sluggish and in the midst of a depression. From this perspective, equities should not be growing. The real issue, however, is that the credit and currency markets are dysfunctional, and so equities will receive capital simply because they are, in an odd sort of way, safer than most other options or, at the very least, their safety is underestimated.


For the reasons outlined in this post, I think equities are headed much higher…

*  (To access the article please copy the URL and paste it into your browser.)

Editor’s Note: The above article has been has edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

Related Articles:

1. Which Will It Be: Gold is About to Go Way UP or the Dow is About to Go Way DOWN?


It is very understandable why investors believe America’s engines are ready to roar again because economic indicators in America are turning up even though bad news barrages us from all sides… [That being said,] I believe the Dow Jones Index has not bottomed when viewed from an historical perspective with gold. We have further to go down in the Dow/gold ratio before the next big bull market begins. [Let me explain.] Words: 1250

2. NOW Is the Time to Get Out of the Stock Market! Here’s Why


With the S&P 500 at its highest level since the summer of 2008, investors previously sidelined by reoccurring fears of a double dip recession and nagging worries about a disorderly Greek default may now be tempted to hold their noses and dive into the market where, presumably, they will be swept along to the land of outsized profits by the Dow 13,000 wave. Having said this, it is worth noting that often the best time to sell is when everyone else is buying. Now may be that time. [Let me explain.] Words: 885

3. Charles Nenner’s Cycle Analysis Predicts Dow to Peak in 2012 and Then Decline to 5,000 – and Much More!


Charles Nenner has been accurately predicting movements in the liquid markets for more than 25 years, and his most recent cycle analysis predicts that the current stock market rally is going to last through Q2 and then begin a major descent in 2013 – with the Dow eventually reaching 5,000! Read on to learn how Nenner’s unique system works and what he forecasts for commodities, currencies, bonds, interest rates and more. Words: 435

4. Fractal Analysis Suggests Dow Could Drop to 6,000 in 2012 and Gold Take Off Like It In 1979


[While] I do not prescribe to the 2012 end of the world or end of an era phenomenon, my recent fractal (pattern) analysis of the Dow suggests that it is forming a similar pattern to that which was formed in the late 60s to early 70s and if this pattern continues in a similar manner…the Dow could indeed have an annus horribilis (horrible year) in 2012. Let me explain. Words: 1416