With the Dow near 18,000 and gold and silver trading lower, today King World News is featuring a piece from one of the greats in the business discussing what is happening around the world and in major markets, including legendary Benjamin Graham's take on the irrationality of markets.

KWN Saut III 4:22:2015

By Jeffrey Saut, Chief Investment Strategist at Raymond James

April 22 (King World News) – Ben Graham once opined:

"You should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his. Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market's quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems.

KWN Saut II 4:22:2015

At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him."

And yesterday Mr. Market showed up in a mildly depressed mood causing a fade into the noon hour of almost 80 Dow points. As I watched the action from my perch here in Las Vegas, I received this blog from CNBC's always insightful John Melloy, who quoted a report from Merrill Lynch. To wit, "One concern we hear is that, at six years old, this seasoned bull market should be ending. But there is no magic number of years at which bull markets expire. Bull markets have averaged five years, but have varied in length from two years to as long as nine. 

Growth, sentiment and other factors matter far more than an arbitrary time period. On business cycles, our economics team notes that recoveries have been getting longer over time, and the current lack of excesses (asset bubbles, overexpansion of cyclicals, high inflation) don't suggest an imminent contraction." Of course that discussion centers on what your definition of a bear market is. Most pundits consider a 20% decline to be a bear market, but I am not one of them. I would note there was a 22.61% downside accident in October of 1987 and it did not end the 1982 – 2000 secular bull market.

In past missives I have noted that since the 2008 Financial Fiasco was so severe it likely will lengthen the typical mid-cycle recovery suggesting the normal business cycle will be elongated. That strengthens Merrill Lynch's thesis, as well as my sense that the month of May will see a resurgence of economic growth as the weather turns more favorable. So we have had three attempts to break out of the downtrend line that forms the topside of the wedge formation and room for a breakout is running out as prices move toward the apex of the wedge. I still favor the upside. ***ALSO JUST RELEASED: 4 Of The Most Shocking Charts Of 2015! CLICK HERE.

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Eric King