The Anatomy Of A Secular Bull Market

Ralph Acampora, CMTAltaira Ltd

March 2009: " A Generational Low"

The Early 1960 Bull Market And Today's Market Environment

• Low Interest Rates

• Low Inflation

Source: “The Fourth Mega Market”, Ralph J. Acampora, CMT

Structural Investor Sentiment

Disbelief/Fear

Quality BluechipsBelief/Trust

SecondariesComplacency/Greed

Speculative/Junk

Five Years Of Problems

• 2009/2011 - The Fear of A World Depression • 2010/2011 - The European Crisis - "The PIIGS"

• 2011 - US Downgrade By S&P • 2012 - "The Arab Spring"

• 2012/2013 - Global Slowdown• 2013 - US Fiscal Cliff

• 2013 - Sequester• 2013 - Syrian Chemical Weapons• 2014 - Russia/Crimea/Ukraine

S&P 500 Annual Performance During The First Five Years Of This Secular Bull Market

March 2009 Low To The Year End of 2009 +53.81%

2010 +14.23%

2011 + 2.20%

2012 +14.53%

2013 +29.67%

Source: Thomson-Reuters in US$

 

"Melt-Up" Versus "A Bubble"

Performance from December 2013 to their respective peaks in early 2014*

% PeakDow Jones Industrial Average +3.46 14 Apr 14S&P 500 Index +4.94 2 Apr 14NASDAQ Composite +7.57 5 Mar 14PHLX Semiconductor Sector Index (SOX) +17.98 3 Apr 14S&P Mid-Cap Index +7.02 2 Apr 14Russell 2000 Index +6.15 4 Mar 14

* Based on intraday highs and intraday lows, Source: Thomson-Reuters

 

Stealth Bear Market

Recent High Fliers Being Liquidated In The First & Second Quarter

Peak % Decline

Facebook 10 Mar 14 -24.21Amazon 21 Jan 14 -28.23Twitter 26 Dec 13 -58.95Yelp 4 Mar 14 -49.06Tesla 4 Mar 14 -29.23Netflix 4 Mar 14 -30.76

Zinga 12 Mar 14 -39.82

Source: Thomson-Reuters

"Rotation Is The Life-Line Of Every Secular Bull Market"

Market Performance | Midterm Election Years: The Four-Year Cycle

Source: Piper Jaffray Technical Research

Positive Q1

Weak Q2 & Q3

Strong Q4

Market Performance | Midterm Election Years: The Four-Year Cycle

Source: Piper Jaffray Technical Research

85

95

105

115

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2010

2010 2014 YTD

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120

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2006

2006 2014 YTD

50

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2002

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2

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22002

2002 2014 YTD

85

95

105

115

125

135

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/199

8

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8

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/199

8

1998

1998 2014 YTD

Sectors Making New Highs

Source: Bloomberg

Consumer Staples XLP

Sectors In Neutral Trends

Consumer Discretionary XLY

Source: Bloomberg

The Engine of Europe

DAX Index

Source: Bloomberg

The Strong Middle East

Gulf States Index (MES)

Source: Bloomberg

All That Glitters…

Gold (XAU)

Source: Bloomberg

Disclaimer

FOR USE WITH PROFESSIONAL INVESTORS ONLY.

This document contains general information only and is not to be acted upon without obtaining specific legal, tax and investment advice from a licensed professional. It is not an offer or solicitation to invest with Altaira Limited. Past performance is not an indication of future returns. Unless stated otherwise, the source of data is Bloomberg.