Initially seen as ominous, the chart was quickly defanged because of horribly distorted scaling by its author.
Raymond James strategist Jeff Saut was among the experts dissecting the charts problems.
In his new weekly Investment Strategy comment, Saut notes that these things work in both directions. Here’s Saut:
Accordingly, the alleged pundits that called for a “crash” four weeks ago have, at least so far, also been proven wrong, which I discussed when dissecting their comparison chart to 1929 showing that when comparing apples-to-apples the correlation totally breaks down (see chart 1 and 2). In fact, as proof that you can make ratio charts do just about anything you want, take a look at chart 3 that suggests this secular bull market has another 300% to 400% left on the upside
Who knows. Maybe it will happen again.