July 23rd marked the 21st anniversary of what I dubbed, the “Garzarelli Bottom”, which turned out to be one of the better stock market calls I made, especially earlier in my career. At that time, stocks hadn’t seen any real downside since 1994 and that year with littered with rolling 5-9% pullbacks. After the bears tried three times to take stocks lower in March, April and May, the bulls powered to yet another new high.
After peaking in early June, the stock market began its first real correction since 1990. At the July 16 low, stocks were down more than 10%. After a feeble bounce for a week, stocks rolled over again, however with much less velocity, participation and vigor. On the morning of July 23rd, legendary Wall Street strategist, Elaine Garzarelli, who was still revered for supposedly calling the crash of 1987, came out with another crash prediction. For contrarians like me, it was too good to be true as I was looking for a lame excuse to see the July 16th low revisited.
Stocks opened sharply lower on the 23rd, but steadily rallied during the day to close towards the high but not on the high. It was then I put out a missive about the Dow going right back to all-time highs and rallying into 1997. Thanks Elaine! I think that was last Wall Street heard from you. It’s always good when a plan comes together…
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