One bear down, another few ursas (both major and minor) to go. Professor Didier Sornete of UCLA, a geophysicist and part-time market seer, has apparently decided that the market may be going up for a while after all. Sornette had been predicting what he called an “antibubble”, a Japan-style unwinding of the “excesses” in the U.S. stock markets that would take U.S. indices to well below current levels, perhaps as low as 500 on the S&P 500. In his most recent missive, he says the following (and the all-caps style is all-his):
WE FIND FOR THE FIRST TIME A STRONG PROBABILITY THAT THE ANTIBUBBLE DOCUMENTED HERE MAY HAVE ENDED. THUS, ALL THE PREDICTIONS GIVEN BELOW ARE CONDITIONED ON THE CONTINUATION OF THE ANTIBUBBLE. THIS IS DIFFERENT FROM UNCONDITIONAL PREDICTIONS. AT THE END OF THIS UPDATE, WE PRESENT THE EVIDENCE FOR THE POSSIBLE END OF THE BUBBLE.
To paraphrase Professor Sornette, the thing that he had assumed was going on is not going on, so the thing that he thought would happen won’t happen. In other words, not to mince phrases, and to cut to the chase, without prevarication or delay, he was wrong.