Nasdaq 2017 = Dow Jones Industrial Average 1950s? Ultra bull market ahead?

Looking back it wasn't surprising that the US stock market would enter a correction at the Nasdaq 5000 range.  This was the previous year 2000 top (~5200).  Breaking through this level required more conviction on behalf of the market as it signified the Nasdaq was finally leaving the dot.com bubble top behind it.  Market watchers have been focusing on Dow 20000 and S&P500 2400 but I think the Nasdaq is the index to watch.

After the 1929 top, the Dow finally reached new ATHs in the early 1950s AFTER which a 18 year bull market followed until concluding in 1968.  The post 2000 Nasdaq has a very similar chart to the post 1929 Dow.  Some differences being that consolidation in the Nasdaq post 2000 was more constructive and shorter in duration than Dow consolidation during the Great Depression.  From absolute top to bottom the Nasdaq corrected less than the Dow and reached new ATHs sooner.  One can suggest that the modern Nasdaq has shown more resilience than the 1930s Dow.  If the Nasdaq follows a similar pattern of Dow 1950 we can expect a long and powerful bull market ahead.

What are the stock charts of Canadian banks saying?

I must admit that I'm worried about the Canadian banks.  Not withstanding all of the risks surrounding the Canadian housing bubble, they're overvalued when compared to their US and especially European counterparts by at least 50%.  P/E and P/B ratios suggest this nearly across the board.  The risks associated with the Canadian real estate market is the single reason why I have no Canadian assets other than my primary residence.  The charts of the Canadian banks are difficult to interpret.  RY & TD are of course the strongest and have held up best over the past 2 years.  But this could be a "flight to supposed safety" as Canadian investors move further into the "safer" banks.  The downtrend the bank charts show doesn't look as severe as the early downtrend prior to the financial crisis but they do illustrate concern among investors.  They continue to post lower lows at a slow grinding pace - 2 years and counting.  Unfortunately, when it comes to downtrends, the most pain is usually felt at the end.  I'm sitting this one out.

Canadian Real Estate Prices

The above chart nicely illustrates the fact that Canadian real estate prices have appreciated significantly for 10 straight years, correcting briefly during the great recession. As this graph climbs higher, owning a new home becomes increasingly expensive relative to renting. Notice that in 1989, real estate prices peaked and entered a 10 year period of price consolidation during the tech boom of the 1990s. The smart money left the real estate market and went into the stock market -- technology stocks in particular. The smart money left the US real estate market in 2008. The price-to-rent index in Canada can't climb indefinitely. Last summer appears to be a potential top in Canadian real-estate as prices are down markedly this summer in metropolitan areas such as the GTA , Vancouver and Montreal. It is possible that history will simply repeat itself and we may experience a prolonged period of stagnation as the speculators become frustrated with the Canadian housing market.

The more important question is where will the smart money head next?