Crisis High 2011
by Clif Droke
Tue, 15 Feb 2011
After two years of issuing “sell” ratings on equities and making bearish pronouncements on the year-ahead economic outlook, Wall Street has finally turned bullish again. Recent analyst polls reveal the consensus outlook for 2011 is for another year of double-digit stock market gains. Even stalwart bears are starting to sound a more optimistic note on the prospects for continued economic recovery in 2011 and beyond.
One analyst who doesn’t share this newfound optimism is far from the conventional Wall Street type. He correctly predicted the 2008 credit crash and also turned bullish in March 2009 following the crisis low. He has made a career of going against the consensus and he’s once again staking his reputation against the Wall Street establishment. He believes that far from being the dawn of a bullish economy, 2011 will witness the end of the post-credit crisis economic recovery. He also believes 2011 will witness a “crisis high” in the stock market and most likely a turning point within the context of the long-term cycles. That analyst is none other than Samuel “Bud” Kress of the SineScope advisory (SJK Capital, 15 Phoenix Ave., Morristown, NJ 07960). His tenth and latest Special Edition is aptly titled, “Crisis High 2011-2014.”
In the more than 10 years that Kress has been writing his Special Editions we’ve seen the long-term sequence of yearly cycles which bear his name unfold according to schedule. We saw the Kress 12-year cycle bottom hard in 2002, producing a major bear market low. We saw the 10-year cycle bottom in 2004, producing a mini-cyclical bear market and another leg of the bull market following its bottom. We saw the 6-year cycle descend into 2008, adding downside impetus to the credit crisis and producing another cyclical bull market in 2009. This year’s notable cycle event is the peaking of the 6-year cycle, which takes on special significance since the 6-year cycle is the last of the major yearly cycles to be in the ascending phase. Once the 6-year peaks later this year, each one of the Kress yearly cycles (with the exception of the 4-year) will be in the final “hard down” phase until late 2014.