Bullish Information

[Jim Nickerson]

Re: Bullish Information

Glad you posted here, jacek, kept me from looking for this thread

Here's a Brimelow article on Sy Harding a guy about whom I have posted in here before. He uses a seasonal timing pattern beginning in October, usually, and ending in April usually. He also calls to attention the general tendancy for markets to be strong the first two years of presidential cycles and though bullish at the moment, he opines that the final lows are not in for this bear market.

I've never subscribed to his newsletter, but were I a young investor looking to learn something, I think I would subscribe to his newsletter. I expect one would learn some useful aspects about trading--not day trading, but seasonal trading at least.

http://www.marketwatch.com/news/stor...8024B17C026%7D

Late Wednesday evening 11/5/08

NEW YORK (MarketWatch) -- There are diamonds in the ashes of the Crash of 2008. One of them is quietly turning bullish.

The Hulbert Financial Digest's investment-letter monitoring through Oct. 31 is now available. It's a disquieting spectacle. Only 12 letters of the 180-plus followed by the HFD have made money in 2008, And the top performer -- Crawford Perspectives, up 33.6% -- uses astrology.

But editor Harding does allow himself some fundamental fulminations about the economy: "As we have said several times in the last year, 'It isn't rocket science to expect that the worst housing meltdown in 30 years, the worst financial system crisis since the Great Depression, the bursting of the worst consumer debt bubble ever, the greatest government debt level in history, and a few other 'worst ever' conditions, would result in a worse than usual economic recession. Going back to the recessions prior to those mild events of 2001 and 1991, the recession of 1981-82 lasted for 16 months, and the unemployment rate reached 10.8%. The 1973-75 recession also lasted 16 months, during which unemployment reached 9.0%. If we are just entering a similar 16-month recession, it would not end until early 2010.' "

Harding says this ties in with his reading of stocks: "The stock market is in a serious bear market, which will see its low for this year in the October/November timeframe, but will not see its final low until 2009 or 2010. That is that, like the bear markets of 2000-2002, and 1973-74, this one will also last for upwards of three years."

But, short-term at least, Street Smart is slipping back into the market.
Wednesday night's hotline said its portfolios designed to catch the seasonal patterns are now 100% invested in Dow Diamonds ETF (DIA:
Dow Diamonds ETF Last: 87.13-4.72-5.14
DIA87.13, -4.72, -5.1%) .

Its non-seasonal Market Timing Strategy portfolio is 45% invested, with equal holdings of SPDR S&P 500 ETF. (SPY:

SPDR S&P 500 ETF Last: 90.86-5.33-5.54%

SPY90.86, -5.33, -5.5%) , PowerShares QQQ. (QQQQ:

PowerShares QQQ Last: 30.56-1.43-4.47%


QQQQ30.56, -1.43, -4.5%) ,

iShares:Russ 2000 Idx. (IWM:
iShares:Russ 2000 Idx Last: 49.59-2.01-3.90%


IWM49.59, -2.01, -3.9%) and 5% in Goldcorp Inc. (GG:
Goldcorp Inc. GG21.04, -1.86, -8.1%)

Harding's reason for buying: a signal last week from an esoteric indicator called Moving Average convergence/ Divergence (MACD), which basically compares different versions of moving averages. But he also comments on what he sees as "weekly patterns," writing, "next week is the week before this month's options expirations week, and the week before tends to be negative. So we are probably in for the first dip which we planned to use to add to holdings. We shall see."

[friendly_jacek]

Re: Bullish Information

The presidential cycle is really hit and miss. This year was supposed to be positive, and I'm not that optimistic. There has to be a major bear rally starting now or anytime soon, though. It's based not only on technicals, poor sentiment but also the plummeting commodities. The same way commodities and especially oil killed the global economy just weeks after peaking, the same way, the incredible slide down will revive some growth, even if only temporarily. I'm looking for a replay of Oct 2002 to March 2003. Now, I hope no new war in 2009.

[sishya]

Re: Bullish Information

Jacek, Thanks for your post.
I am also thinking of going long "if" S&P drops to 850-860 range. If not, I stay sidelines.
I am thinking of adding EWJ and UYG.

[Jim Nickerson]

Re: Bullish Information

The presidential cycle is really hit and miss. This year was supposed to be positive, and I'm not that optimistic. There has to be a major bear rally starting now or anytime soon, though. It's based not only on technicals, poor sentiment but also the plummeting commodities. The same way commodities and especially oil killed the global economy just weeks after peaking, the same way, the incredible slide down will revive some growth, even if only temporarily. I'm looking for a replay of Oct 2002 to March 2003. Now, I hope no new war in 2009.

jacek, I believe more than once you have written, "there has to be a rally." The only thing certain is death, nothing else has to happen.

I don't disagree with you that many things point to the recent action as placing the October lows into being significant as a longer term bottom, but for a bear market that has been based on the collapse of the credit bubble that went on for years, a 12-13 month decline hardly seems to be enough to really cleanse the markets (whatever that means). A big difference between the current October lows and those of 2002, it that the latter occurred 34-36 months AFTER the markets had topped.

Since the intraday lows from 10/10/08 there have already been two rallies of 24% and 20%, but one would have to have been perfect in timing to have gotten those gains, so probably no one did; nevertheless, the rallies did occur. And there seems to me to be a lot of smart people, many or probably all, smarter than I who are looking for a pop upwards in here, and that worries me too.

I am long 50% in one thing or another, posted elsewhere, but I am nervous.

[Starving Steve]

Re: Bullish Information

Just reviewing my portfolio, in the last few months, I have been shifting money away from bonds and into stoxx. The reason for this move has been pathetic yields on bonds and new "improved" yields on stoxx.

If Joe Six-packs like me are turning bullish on stoxx, that has to be a bearish contrary indicator. And Abbey Joseph Cohen's pie-hole is another bearish contrary indicator. Bob Brinker's pie-hole is another bearish contrary indicator. Bill Flannigan's pie-hole is yet another such indicator.

What worries me --- and keeps me up at night--- is Bernankee and his policies. The risk is hyper-inflation, and that can not be good for stoxx.

I am into oil stocks as a value play. But what value would stoxx have if money is competitively de-valued, worldwide? That would just make stoxx a joke.

I am looking to buy additional core gold at $600 per oz, but the PM market may not give me that opportunity. Anyway, I will watch but not buy until the price is right, and right means $600.

[hellstan]

Re: Bullish Information

Since the intraday lows from 10/10/08 there have already been two rallies of 24% and 20%, but one would have to have been perfect in timing to have gotten those gains, so probably no one did; nevertheless, the rallies did occur. And there seems to me to be a lot of smart people, many or probably all, smarter than I who are looking for a pop upwards in here, and that worries me too.

I am long 50% in one thing or another, posted elsewhere, but I am nervous.

Jim,
At least, a few analysts I follow did catch the timing.
Apart Marc Faber and McHugh, predicting a rally from now (or the end of november) until march, you have
Louis Navellier, who told his subscribers to buy since 3 weeks now.
Had I followed his advice, for instance on FSLR or FSYS, I would be up
25 % and 54 % respectively.
But I did not, because I was too nervous too.

[Jim Nickerson]

Re: Bullish Information

This is probably not pertinent, but it is a bit of indication of how bearish some are, as of yesterday when the DJI closed at 7552.29. 90% of those responding apparently thought the DJI would continue its decline.

Personally, I too think it will continue to decline, but I am positioned for it to go up to some extent, someday, before it might reach the ultimate low for the current bear market.

The underlining is a happenstance and not for emphasis by anyone.

Yesterday, we asked Bespoke readers how low they thought the Dow would get between now and 2009. The number that received the most responses was 6,000. Of the 675 readers who participated in the poll, 215 (32%) said 6,000 would be the low, 167 (25%) said 7,000 would be the low, and 108 (16%) said 5,000 would be the low. To reach 6,000, the Dow would have to fall another 22% from yesterday's close, and it would be down 57.74% from its record high reached in October 2007.

http://bespokeinvest.typepad.com/bespoke/

Edit: Upon re-reading the question asked: How low between yesterday and 2009?, it strikes me as very short term bullish, I was intially thinking in terms of it asking about the ultimate low. However, recent market behavior has punished anyone with the slightest bullishness outside of day traders who have gotten it correct.

[Jim Nickerson]

Re: Bullish Information

http://www.investmentpostcards.com/2...009/#more-3568

David Fuller: 10 tangible reasons for a rally
“I have listed and illustrated 10 tangible reasons for a rally (no cheerleading here), and also discussed a crucial missing ingredient.

1. Governments have flooded the system with liquidity. It takes time for this to filter through to the economy but it will reach the stock market more quickly.

2. Interest rates are at record lows for the US and UK, both short-term and long-term, and heading lower elsewhere. This is an ideal background for stock market recoveries.

3. Valuations are much improved, despite legitimate concerns over the earnings outlook for at least the first half of 2009. Equity yields are competitive with government bond yields, despite the near certainty of more dividend cuts than increases over the next six months.

4. Corporate bond yields peaked in October and November and have fallen significantly. They have also begun to improve their performance relative to government bonds.

5. Various measures of investor/advisor sentiment reached extreme lows in October.

6. The VIX Index peaked in October and is trending lower.

7. Commodity indices have fallen significantly, lowering inflationary pressures. Historically, equities have done best in disinflationary environments.

8. In many countries, the financial sector is showing strength relative to the broader indices. This is a key lead indicator.

9. Levels of cash are at record highs.

10. Most broad stock market indices show some evidence of base formation development. This is less clear for the DOW, but can be seen for the FTSE 100, DAX, SX5E, FSSTI and NKY, to mention a few of many.

“In conclusion, technical evidence remains more conducive to a stock market rally rather than another slump. Over the last three weeks we have repeatedly mentioned the December reaction lows. They need to hold to remain consistent with our expectations for a ranging stock market recovery extending well into Q1 2009.

“The crucial missing ingredient for stock markets to date has been confidence. Nevertheless that could change in January, given the high levels of cash held by most institutional investors. If stock markets languish in the New Year, as many expect, there will be little reason for investors to reinvest in the stock market. However, if stock market indices surprise the bearish consensus and start to break upwards rather than downwards from their trading ranges, institutional investors will be under increasing pressure to participate. Failure to do so would put them at a competitive disadvantage in terms of 2009’s performance.

“Lastly, if the global economy does not show evidence that the recession is ending by Q3 2009, in response to the stimulus programmes, stock markets will be susceptible to a significant retracement of gains achieved during the first half of the year.”
Source: David Fuller, Fullermoney, December 30, 2008.

My emphasis.

It is interesting and perplexing to me that this week's AAII sentiment poll of Bulls 24.0%, Bears 54.7% is the second lowest number of Bulls since 7/11/08, when it was 22.2%, after which there was at least a 60-point SPX rally to 8/15, and 7/11 was at a bottom to that point.

The third lowest number of Bulls in AAII was 24.4 and that was on 11/21/08, which so far has been the bottom, and since then there has been a 25.75% SPX off its intraday lows of 11/21. So with a 190-point SPX rally, the AAII Bulls are at a near low since the SPX peak of 1425 at the middle of May, 2008.

It is unusual to see such overall bearishness in a sentiment indicator after what so far has been an impressive rally from 11/21.

Though so-called conventional wisdom is that extremes in sentiment tend to be wrong, .i.e, maximum bearishness often occurs near market lows and vice versa for big bullishness, occasionally the sentiments in the polls are correct.

Currently II sentiment in tied 38.5%. In July 2008, II bullishness reached a low going back to July, 1994 (based on a report I copied). So despite a 60 point rally from that II low in Bulls, any investment advisors who stayed bearish over the five week rally of 60 points (I'm using weekly closing prices of SPX for these numbers) were proven quite correct into the Nov. 21 lows, and this same observation applies to the AAII poll.

Regarding breadth the equity markets are very overbought to my interpretation and for whatever that is worth. Charts of the major indices all look quite positive to my interpretation.

Volume accompanying the recent up moves has sucked.

My bottom line: I don't know WTF of any significance is to occur over the next say 4 weeks. I think there should be a pullback in here, but I am not selling my long positions or entering short positions, but that could change quickly between now and the next few days. Actually, if I had had all the data available only after the markets closed Friday, but before they closed Friday I would be happier being out of most if not all of my long positions.

[BiscayneSunrise]

Re: Bullish Information

Jim,

I think the reason why the bearishness indicator is still so low is because it had been at record low levels for so long it will take some time for it to creep back up. Also, people are beginning to understand the implications of things we talk about here and are genuinely worried.

Having said that, the market has a mind of its own and is now in bonafide rally mode.

I am paraphrasing Investors Business Daily now but they are saying, forget 2008, forget everything you think you know and what you think should happen. The market is in a confirmed rally. That is the fact.

Short term, almost certainly, but the market for some reason is ignoring the current data and pessimism and is headed up.

[Jim Nickerson]

Re: Bullish Information Re. Biggs: worst of recession over?

http://www.bloomberg.com/apps/news?p...5Pw&refer=home Bloomberg 1/9/09

U.S. investors are looking ahead, and they like what they see, say Barton Biggs and Robert Doll.

The 21 percent rally in the Standard & Poor’s 500 Index since Nov. 20 reflects speculation the worst of the recession is over, according to Biggs, managing partner at hedge fund Traxis Partners LLC, and Doll, chief investment officer for BlackRock Inc. Equities will probably keep rising, they said yesterday on Bloomberg Television.
.
.
“Sometime around the middle of the year there’s going to be pretty conclusive evidence that the economy has stabilized,” Biggs said. “That’s what the stock market is now looking forward and seeing, and that’s why I think that this rally carries further.”
.
.
He also favors companies in less-developed countries. “The growth opportunities will be in emerging markets,” he said. “They are considerably cheaper then developed markets.”
.
.
Recession Nadir
Doll said the worst of the recession is probably over after more than $1 trillion of bank losses froze credit markets in 2008. U.S. gross domestic product may have contracted 4.35 percent in the last three months of 2008, according to the average estimate of economists surveyed by Bloomberg.

“The fourth quarter that just ended is likely to be the worst of the recession,” said Doll. He said Nov. 20 probably was the bottom for the stock market.

Both these guys run other people's money.

[Rantly McTirade]

Re: Bullish Information

To be fair, I believe Biggs has a nice chunk of his own money that he runs alongside his clients.

[Slimprofits]

Re: Bullish Information

Bear in mind: MAY 31, 2008 One Bold Analyst's Latest View: Worst Is Over for Economy, Stocks

Now, Mr. Biggs, 75 years old, believes the worst is over for the economy and for the stock market. While the market is likely to move sideways for the rest of 2008, he says there will be no recession -- and with the remaining poisons purged from the system, stocks should move upward next year.

[Jim Nickerson]

Re: Bullish Information

Bear in mind: MAY 31, 2008 One Bold Analyst's Latest View: Worst Is Over for Economy, Stocks

Now, Mr. Biggs, 75 years old, believes the worst is over for the economy and for the stock market. While the market is likely to move sideways for the rest of 2008, he says there will be no recession -- and with the remaining poisons purged from the system, stocks should move upward next year.

Ole Barton was a bit wrong there, wasn't he? Thanks for posting a followup on what was a wrong analysis. The longer I live, the less I believe you can "buy" what anyone who runs money has to say about market direction: unless by chance the market is in a bull run, and then their continuous "buy side" recommendations work.

[FRED]

Re: Bullish Information

Ole Barton was a bit wrong there, wasn't he? Thanks for posting a followup on what was a wrong analysis. The longer I live, the less I believe you can "buy" what anyone who runs money has to say about market direction: unless by chance the market is in a bull run, and then their continuous "buy side" recommendations work.

Jim, you got it!

Editorial content that sells a product is not the same thing as editorial that develops a long term investment thesis, even though they may at times read the same way.

[metalman]

Re: Bullish Information

metalman,

Granville's advice is posted, feel free later to look back whenever you run out of comments and see how his prognotication turned out.

Originally Posted by metalman
will anyone check to see if the recount of granville's record is accurate? doubt it. if he's a 'friend of marketwatch' they'll note the 10 times he was right and ignore the 10 times he was wrong.

let's track his advice... 'to do some buying in the airlines, banks, brokers, and casinos, but keep shorting the oils." reads like a prescription for losing the most money possible in the shortest time. buying banks and casinos at the top of a debt deflation? what an idiot.
metalman,

Granville's advice is posted, feel free later to look back whenever you run out of comments and see how his prognotication turned out.

since aug. 8, 2008...

long airlines...

lost $$$


lost $$$


flat $$$

i don't need to show the carnage in banks, brokers and casinos. ok, maybe casinos... as they also represent the bank, broker casinos...



doh!


double doh!



does this guy granville have any money left? maybe his readers made enough shorting oil... the one call he got right... to buy something to wear...