A perfect correlation - hostile takeover bids surpass the record set in Year 2000 - another sign of a sever bust in US stock markets?
Sam Adelton
Sep. 28, 2006

Something interesting happened. Just like in year 2000 when the stock market topped out, this year in first nine months the amount of hostile take overs have set a record. When we looked at the history of stock markets in the last 100 tears, every bull market ended with massive hostile bids taking M&As to record levels. History is repeating again. Arrogance and false sense of power are always followed by disaster. The busts that come after these record setting M&A activities are monumental.

This time we are also seeing worst level of divergences. The false liquidity in the market place have chased a few stocks to take them to a new level. While Dow is about to make a new all time high, Nasdaq is struggling to cross 2300 mark - forget about all time highs above 5000.

The market is now ripe for a collapse. It is the ''B'' wave in Elliot Wave Theory. B waves are most treacherous. The top can go anywhere but when top is in place the real third wave starts downwards and that is always catastrophic.

Technical patterns are difficult to understand unless correlated with statistical and quantitative data supporting the fundamentals. As I mentioned in my last article on this topic, a new high will in place in a spectacular fashion because of short covering and loading of elevators in the top floor. After that the elevator comes down fully occupied. Stock market and real estate markets most likely come down simultaneously.

A perfect correlation - hostile takeover bids surpass the record set in Year 2000 - another sign of a sever bust in US stock markets?
Sam Adelton
History is repeating again. Arrogance and false sense of power are always followed by disaster.
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