Tuesday, 28 February 2012
SP500 in 2012 like 2011 or 1988
History repeats itself, but never exactly. Most of the time when remarkable similarities are seen suddenly another pattern originates. But still the similarities between 2012 until now and 2011 or the recovery after the crash of 1987 are big. Since November 2011 we see a repetition of 2010 and 1987.
The ISM could go down over some months and that could cause continuing similarities with 2011. QE3 could turn 2012 into a better year than 2011. Also the US housing market is now less weak, credit growth is better, employment growth is better. The expectations for profit growth are lower and can be more easily be better than implied. Against these good odds are new possible disasters in Europe and Iran or maybe something new.