U.S. Stock Market Rally Over; Buy and Hold Still Bad Advice

By: Mike_Shedlock

Stock-Markets
Best Financial Markets Analysis ArticleJeffrey DeGraaf, the top-ranked technical analyst in Institutional Investor magazine’s poll for the past four years says S&P 500 Rally Poised to End.The 34 percent rebound in the Standard & Poor’s 500 Index since March shows few hallmarks of a bull market, and stocks will probably stagnate for years, top-ranked analyst Jeffrey deGraaf said.The S&P 500 is at a level it first surpassed in 1997 even after the steepest quarterly advance in a decade, and is down 43 percent from its October 2007 record, according to data compiled by Bloomberg. The main benchmark for American equities probably will continue to make “no net price progress” for at least two more years, deGraaf said in an interview.

“The market in my best estimation is probably range-bound between roughly 1,000 on the upside and 700 on the downside, but I would put the risk to the downside,” he said. DeGraaf is a senior managing director at ISI Group Inc. in New York and was the top-ranked technical analyst in Institutional Investor magazine’s poll for the past four years.

“Japan from 1992 to 2000 was in what aviators call a phugoid -- which is just this long oscillation in price,” deGraaf said. “It looks to us like there’s a reasonable probability that we’re going to enter into a similar period, with more government intervention and all these things that tend to come about after a bubble, particularly one that’s been driven by credit.”

Long Term Buy And Hold Is Still Bad Advice
I have been saying essentially the same thing as DeGraaf for months. Here is a case in point: Long Term Buy And Hold Is Still Bad Advice. In spite of what you hear from main stream media and self-serving advice from Wall Street, an investment philosophy of long term buy and hold is not what it's cracked up to be. Unfortunately, many boomers headed into retirement are finding that out now, at the worst possible time. Moreover, looking ahead, I doubt the next decade is going to be much better than the last.

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