AuthorTopic: Harry Dent Goes Long On The Trump Rally  (Read 277 times)

Offline Eddie

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Harry Dent Goes Long On The Trump Rally
« on: December 19, 2016, 06:32:37 AM »
Could there be a better contrarian indicator? I'm posting this for entertainment value only. I don't listen to Harry. He's been wrong almost as many times as Robert Prechter.

This Blow-Off Trump Rally Looks Real (Damn It!)

Harry Dent ,  December 14, 2016
   
Between late 2014 and November 2016, the markets went nowhere. They made no more than a few, very minor, new highs. It looked like a classic head-and-shoulders, rounded-top pattern, with a break of 1,800 sounding the death knell.

All of my research pointed to signs that the end was near. The Dow was set to shed thousands of points in short order.

How much has changed since November 8…

That rounded-top pattern now looks to be a long 4th wave correction that’s moving into a classic final 5th wave “blow-off” pattern.

The market has flipped from seeing Trump as an impulsive wrecking ball to some kind of Messiah, and it’s doing so on high volume since the election. It’s totally buying his promise to grow the economy 3% to 4% sustainably again.

The problem is that this is demographically impossible… Period!

Just ask Japan, which has infused four times the QE relative to its GDP since 1997. Despite that, it has grown on average 0% in GDP, inflation and productivity.

That’s because aging economies cannot grow as fast as younger ones!

And according to my research, the U.S. population will only grow 0.27% over the next 50 years.

There will be near-zero workforce growth after several years of mildly negative growth. We have to realize that, while QE has allowed us to re-employ the people laid off in 2008-2009, we’ll soon revert back to growing very slowly now that we are at or very near full employment again.

Productivity has dropped to zero as well. Older people don’t get more productive as they age. They get less productive (I’ll talk more about this in the January Leading Edge.)

Despite all of that, the markets continue to go up.

So, on Monday I put my cap in my hands and wrote a Mea Culpa to my loyal, paid subscribers. Today, I send you the same message…

No matter how irrational this market is, I admit I’ve gotten the timing wrong.

The markets have defied all of my research, and all of the indicators I follow closely. They’ve even defied dozens of other indicators that have proved accurate before, that I looked to when it became clear that my tools were failing.

The big question is, how high does this go?

At this point, I can only offer a guess. This market is completely unpredictable and irrational. I recently just saw a sentiment indicator for Wall Street bullishness/bearishness that suggests stocks could go up as much as 20%.

My best guess is that this rally peaks somewhere between late February and early March or into mid-May, at the latest. The Dow could go as high as 21,500 and the S&P 500 as high as 2,500.

I did a telephonic interview on CNBC Fast Money last week, explaining my outlook on the market now. You can listen to it here. I still believe the markets are due for a massive correction. Nothing has changed on that front. Where I’ve failed is on timing. And for that, I apologize.

But that’s why we operate our business the way we do. We knew, from the outset, that timing markets is challenging. Seeing things from 10,000 feet is one thing. Putting your money to work on the ground is an entirely different thing, and that’s exactly why we’ve built our team the way we have. With Adam, Charles, Ben, Lance and John you’ve got strategies and expertise that help you profit from the current trends, regardless of market direction.



http://economyandmarkets.com/economy/forecasts/harry-dent-trump-rally-looks-real-damn-it/

What makes the desert beautiful is that somewhere it hides a well.

 

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