I'm dating myself but if you recall the 1980 hit by The Vapors, it may be ringing true today:
I'm turning Japanese I think I'm turning Japanese I really think so
Turning Japanese I think I'm turning Japanese I really think so
I'm turning Japanese I think I'm turning Japanese I really think so
Turning Japanese I think I'm turning Japanese I really think so
Editor sees U.S. stocks going parabolic like Nikkei of 1980s
The respected Gartman Letter, marketed to investment institutions and not monitored by the HFD, has a chilling explanation of what's going on.
Editor Dennis Gartman wrote in the past week: "We stand in awe of the sheer majesty of this rise." But Gartman's response is to review what he wrote about an earlier unstoppable bull: the Japanese stock market of the late 1980s.
As Gartman remembers: "Shares there were running skyward even as the economies of the rest of the world were tanking. The Bubble was going "parabolic," and every modest decline was met with huge new buying, that soon took shares to incredible new highs as the Nikkei soared toward 40,000."
Gartman explains: "Already trading at incredibly over-bought levels when it had risen from 4,000 in late '75 to 8,000 by the mid-'80s, in reality the rally had only just begun! From '83-'85, the Nikkei rose 8,000 to 18,000 ... and still the rally had only just begun! From '86-early '88, it rose from 18,000 to 28,000 ... and still the rally had only just begun, for in those last two years, the Nikkei moved from 28,000 to 40,000, with the last 7.000 points coming in the final weeks of '89!"
Gartman draws this moral: "We must remember that when markets go parabolic (and they do indeed go parabolic from time to time) it is important to remember one of our oldest trading aphorisms: that the final 10% of the time frame of a bull market can, and often will, encompass 50-75% of the price movement. We may be in that environment now. Things seem to want to go "parabolic." What may seem like insanity may be nothing more than history repeating itself once again."
Gartman is not predicting that U.S. stocks are on a permanent high plateau, rather the reverse: "As we have said, this will stop when it stops and not a moment before. It will stop of its own volition; it will stop suddenly; it will end in tears, but it can and likely shall continue to move higher nonetheless.'
Gartman's conclusion: "Speculators are advised not to try to catch falling pianos, and not to try to stop rockets in their initial push higher."
