There is no substantive evidence that the above quote was made by Mark Twain, but he did write a far more eloquent observation in a novel, entitled “The Gilded Age: A Tale of To-Day”, he co-wrote in 1874;

History never repeats itself, but the kaleidoscopic combinations of the pictured present often seem to be constructed out of the broken fragments of antique legends.

Piecing through the ever more complex and voluminous data 140 years on is it still possible to get a hint of the future from fragments of the past; antique or otherwise. In the 21^st Century investment cycles seem to come around faster than Lewis Hamilton. In the first 14 years we have had significant market peaks in 2000, 2007 and quite possibly 2014. Prior to that you have to go back firstly to 1987 and then 1974 then 1929. Things are speeding up!

But are we near a peak right now? I am indebted to the Elliot Wave Theorist (www.elliottwave.com) for some of the following clues. We have had something of a selloff in mid and small cap stocks already, both here and in the US. The Russell 2000 index of small cap shares saw its closing high back in March as did the FTSE 250 and Small Cap indices suggesting a meaningful switch from risk on to risk off, a pattern that occurred in 2007.

David Fuller's view

Here is View from the Bridge.

Many people have given us numerous reasons for Wall Street’s top, as you may have noticed over the last year and a half.  Needless to say, market tops are difficult to call correctly.  There are plenty of signs of a maturing bull market, as this service has been pointing out for a number of months but which are the crucial ones?

If the bull market really is over, you will probably see it first from weary ground troops, represented by the Russell 2000, rather than the big capitalisation leaders.  RTY is testing the lower side of its range once again and another rally is required to avoid setting off alarm bells.

Something no one seems to be mentioning, but which worries me, is the Alibaba float.  The Economist and others had suggest eight eight (August 8^th) for luck, because it is pronounced ba ba in Mandarin.  Well, there may be worse reasons but commonsense has prevailed because a monster float during Wall Street’s summer holidays is not a good idea.  Even after people return in September this float, whenever it occurs, will represent a huge chunk of supply in a nervous market.

Meanwhile, interest rates remain low; many of the uptrends for global indices are still intact, and most other stock markets are on lower valuations than Wall Street.  Those are not the preconditions for an imminent bear market that I would expect.

Different aspects of his topic are also discussed in Monday’s Audio.