Archive for May 2013

05/14/13 – Buying Stampede – Session 94

May 14, 2013

MARKET MESSAGES 

5/14/13 . . . 

The following is Jeff Saut’s comments for Tuesday.  One of his remarks is about the buying stampede.  He thinks the move to 1700 SPX is in the bag, but he always leaves open the possibility of a “Black Swan” event.

One of the cycles from page 1 of my charts has leaned towards a late 2013 peak.  Is it correct, I dunno????

A swoon event should precede any lasting peak, sometimes by many months (1998 to 2000) or by many weeks (June to October 2007).

This market just keeps going and going and going.   I have not witnessed many continuous events like this.  Jeff says it’s session 94 (today) and it’s historic (not so sure about that).  Jeff came onto the market scene in 1973 or 1974, while I’ve been around the market since 1956 (yup, an old fart).  I think there is a longer period, but the parameters that Jeff uses could be different than what my memory recalls.

After the 1962 October Cuban missile crisis the market climbed seemingly constantly.  This skein lasted until the peak in early 1966 (beginning a 3 part bear market).  The trend was interrupted a few months prior to the actual peak (see chart below).  This dynamic uptrend lasted a little over 3 years and was punctuated by quick corrections that were meaningless.  In late 1963 (November), there is a market drop that denotes Kennedy’s assassination.  He was dead 13 months after the Cuban missile crisis, funny timing isn’t it.

1966 Peak

1966 Peak

1962 October Cuban missile crisis

The Cuban missile crisis was really the biggest cold war event of my life.  We were threaten with immediate nuclear annihilation.  Here we were, eyeball to eyeball with the Russians and both sides had their trigger fingers on their ICBMs and bomber fleets.  At this time bombers were the real nuclear delivery method.  ICBMs were relatively new and both sides had rather small numbers of these missiles (the US had a small numerical advantage in 1962).

Neither side wanted to blink, neither Kennedy or Khrushchev.  Khrushchev had bitten off more than he wanted and tried to growl loudly and scare Kennedy.  That didn’t work and surprised Khrushchev.  He had previously gotten the idea that Kennedy was a weak person.  That was a bad miscalculation for Khrushchev.

Thankfully Khrushchev blinked.  His blink was made somewhat palatable for him by an under the table agreement to withdraw US missiles from Turkey.  The Turkey deal was never acknowledged as part of the Cuban withdrawal, but everyone with a thinking brain knew better.

I lived in San Diego at the time and remember thousands and thousands of Marines pouring out of Camp Pendleton and getting on ships in San Diego harbor.  Troops streaming down the highway was an everyday, all day event that continued until Pendleton was empty (someone turned out the lights).

As we neared the date when the Russians ships carrying more missiles drew close to Cuba, there wasn’t one Navy ship left in San Diego (do you suppose they were thinking about Pearl Harbor???).  There was TV coverage of countless jeeps and troops camped on the sand in Florida with a fleet of Navy ships surrounding Cuba.  Nuclear War was imminent and the newspapers headlines screamed WAR.

How many Marines, sailors, soldiers and civilians would have died if the ICBMs (and bombers) had been cut loose from both sides???  It was enough to really scare a young guy.  Everyone knew what could happen in a nuclear war, just “duck and cover” and you would be just fine, forget the fallout it probably wasn’t important.  During this period we also had air raid sirens all over the city that went off every Monday at noon.  All of this to remind us of the precarious period of history that we lived.  Thankfully in October 1962 we only made newspaper headlines and no bodies (other than one U2 pilot).

After October 1962, the red phone was implemented where the Soviet Premier or the President could pick it up and talk to the other leader almost immediately.

Kennedy was assassinated 13 months after this crisis.

Khrushchev Cuban Missile Crisis AftermathInteresting Notes

  • Click on any picture or chart to enlarge it

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