Bears Locate a Template for a Crash

Facing the Future With the Past

Henry Ford wrote that "history is bunk" and Percy Bysshe Shelley (who was married to Mary Shelley, the author of Frankenstein) wrote "fear not the future, weep not for the past," and they both could be right. Nevertheless, I have always invested on the basis, as Karl Marx writes, "that history repeats itself" or as Pearl Buck wrote, "one faces the future with one's past."

To be sure, although there's a strong parallel between early 2007 and early 1994, it is less clear when a correction might take place in 2007. For now the burden of proof lies squarely on the ursine crowd because those who invest/trade at the "Altar of Momentum" are firmly in control.

However, the near panic to the upside in some of the more speculative fringes of the U.S. equity market suggest to this observer that the end of the market rise might be at hand -- sooner rather than later. Some of those stocks include:

Gambling stocks (Las Vegas Sands(LVS Quote), Wynn Resorts (WYNN Quote));

Brokerage stocks (Goldman Sachs (GS Quote), Merrill Lynch (MER Quote), Lehman Bros. (LEH Quote));

Publicly traded exchanges (NYSE Group (NYX Quote), InterContinental Exchange (ICE Quote), Chicago Mercantile Exchange (CME Quote));

And steels (Allegheny Technologies (ATI Quote), U.S. Steel (X Quote)).