Dividend Growth Investing, Retirement Income, Stock Market Investing, Stock Market Timing

It’s 1987 All Over Again!

Maybe. I don’t know. It could be. The market starting falling hard a week and a half ago, and I started to get excited, as I thought I was beginning to smell… opportunity. And, fortunately, for us, it was! I was an aggressive buyer Friday morning the 21st, and Monday morning the 24th. After it was over, I surmised that this was going to result in a rather protracted period of opportunity, and sent more cash to our accounts.

By way of quick review, I said this is going to look to all the world like the beginning, and even pretty good confirmation of, a new Bear Market. The S&P 500 triple-topped in May, June and July… (and, of course, I didn’t have the ‘good sense’ to bail out then). It has since rolled-over, created a pennant flag out of the early-July lows and the later-July peak. It has sinceĀ broken beneath the upwardly sloping line of support in that pennant flag last Thursday the 20th… and proceeded to crash. Oopsey!

This is the last trading day of the month. Whether we’re talking a simple 17-month moving average, or the 50-day and 200-day moving average system, by virtually any technical timing system devised by man, today’s close is highly likely to be beneath any, or all, of them. There’s going to be a lot more Bear talk, should that happen.

As I write… the index futures trading overseas for our markets are down, and not by just a little bit either, but not by a huge amount… so, don’t freak. It’s been a week since the crash. We’ve had a recovery bounce, of a sort, and now it’s that time, with all I’ve said above, to begin to look for another decline toward the previous lows. It’s interesting that we’ve only been able to retrace one half of the decline since the support break. That says a lot to market technicians, and may serve to confirm the ‘script’ I wrote last time.

The 500 is well under its 200 day moving average. In less than 2 week’s time, it broke down thru its 50-day, 200-day, the 50-day has rolled over to trend downward, the 50-day has just “death-crossed” under the 200-day, and the 200-day has also already rolled over. All 5 of the absolutely necessary things that have to happen to commence a new Bear Market has taken place… and, I’m looking to be a buyer again here soon. Am I whacked, or something? No, I’m an investor in safe-dividend growing stocks, and anytime there’s going to be fearful, panic, wholesale dumping of shares, I am going to be a buyer.

if it’s anything like 1987, or, more likely, like 2011… this is just a precursor to next really big leg up is all. And, if it should turn out that it isn’t… and there’s so much more really, really ugly downside about to happen. Don’t you know that is only more opportunity to acquire more even lower-priced, higher-yielding, safe-dividend growing issues; and a once-in-a-generation opportunity? We’re off 1% overseas, it’s 4:00 am EST, and I’m gong back to bed!

Here’s to your successful investing!
Harold F Crowell

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