Jeff Saut: This Market Could Be 1979 All Over Again

jeff saut

The latest call from Raymond James’ Jeff Saut:

The call for this week: Goodbye and good riddance to 3Q11, which has been the worst performing quarter for the SPX since 4Q08. Welcome to 4Q11, and the month of October, which has been termed the “Bear Killer” since many downtrends have found their nadir in the Halloween month. Indeed, recall that after being bearish since the Dow Theory “sell signal” of November 21, 2007, we turned bullish in October 2008 when 93% of all the stocks traded on the NYSE made new annual lows. Hopefully, this month will prove as kind for stocks as 2008. I do find it interesting that our analogue to the bottoming sequences of October 1978 and October 1979 continues to have a remarkable correlation to the current pattern of the SPX following its mini-crash of early August. I hope the resolution will also parallel 1978/1979’s subsequent rallies that carried the averages higher into the new year. Of course, if the August 9, 2011 intraday low of 1101.54 is decisively violated we will have to reconsider our bullish stance.

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