Comparing this to the last cycle chart for the DJIA, there are several high-amplitude historical cycles that continue to attract prices lower. As I mentioned previously, the take home message is that the Fed, by buying financial assets from banks at the rate of $85 billion per month, may have been successful in extending the cycle amplitudes, but is pushing against history.
Like everyone else, I am trying to make sense of what appears to be a major misstep by the ECB/IMF with respect to the Cyprus dilemma. Since confidence is the spittle holding the banking system together given the drought of liquidity, anything that inspires people to move their assets out of banks is exactly the wrong way to restore trust in the banking system. The ECB may have made bank runs a major topic of discussion not just in Cyprus, but in any EU country with a lame banking system. Perhaps as Martin Armstrong likes to say: It's just time.