Bullish Information

[Jim Nickerson]

Re: Bullish Information Re. Sy Harding observation of facts.

http://www.decisionpoint.com/TAC/HARDING.html

Whether or not Harding's recounting of this past week's events and their little effects on the equity markets proves to be bullish remains to be seen. I think it is worth considering that despite "an avalanche" of bad news not only on Friday, but for many weeks, the market did not cave-in this week but rather moved up rather sharply.

By Sy Harding
IT WAS A TEFLON MARKET THIS WEEK!



The only thing about which I disagree with Harding is his description of the volume being "mediocre." For the past two weeks NYSE volume has really sucked, but has just sucked on the Nasdaq.

For those few not keeping up, volume this week on NASDAQ was worst since weekending 10/5/07 (excepting xmas week) which was the week before the highs so far in the DJI and SPX and about three weeks before NASDAQ topped. For the NYSE it was the worst week since weekending 10/12/08 again except for xmas week. In retrospect, the low volume in October supported that the moves up in equities was not supported.

I guess one could deduce the same for the this week's equity losses of -2-3% of the indices I track, there was no support in volume. In January at the lows there were big spikes in volume at lows as well as in August 07 in Nasdaq and NYSE ($NYA).

My opinion is that if the equity markets are headed for at least some sort of retest of Jan and March lows it should be manifested by some serious increase in volume. The other side of the coin is that further declines in here to area of previous lows could break through them.

[Jim Nickerson]

Re: Bullish Information Re. Sy Harding observation of facts.

http://www.decisionpoint.com/TAC/HARDING.html

Whether or not Harding's recounting of this past week's events and their little effects on the equity markets proves to be bullish remains to be seen. I think it is worth considering that despite "an avalanche" of bad news not only on Friday, but for many weeks, the market did not cave-in this week but rather moved up rather sharply.

By Sy Harding
IT WAS A TEFLON MARKET THIS WEEK!

..on Monday the financial media was fueling worry, making much of the scary sounding fact that the first quarter was the worst quarter for the stock market since the serious bear market in 2002.

On Tuesday, the first day of the new quarter, one of the world's largest investment banks, UBS, reported it lost $12 billion in the 1st quarter, on a write-down of another $19 billion in illiquid real estate assets. Deutsche Bank warned it will write down another $4 billion of similarly depressed assets. Reports showed auto sales fell by double-digit percentages in March. Morgan Stanley potentially poured fuel on a fire by warning that the world faces the most severe investment banking crisis in 30 years. A couple of months ago those kinds of reports might have sent the Dow down 500 points or more. It closed up 391 points.
On Wednesday came the report that factory orders fell 1.3% in February. In testimony before Congress Fed Chairman Bernanke stalled the market for awhile by saying for the first time that the U.S. might be headed into a recession, and speaking "of a very difficult time" for the U.S. economy. The International Monetary Fund reported it had lowered its economic forecasts for the U.S.
On Thursday, came the report that new unemployment claims jumped an unexpected 38,000 last week. And the bad news became an avalanche on Friday.

The latest New York Times/CBS News poll was released showing that a record 81% of Americans are unhappy with the country's direction.
The nervously awaited monthly jobs report was a shocker, showing 80,000 jobs were lost in March. Even worse, the previously announced numbers for January and February were revised downward by a total of 67,000 jobs. So over the three months of the first quarter a total of 232,000 jobs were lost
Lehman Bros. released a forecast that total global write-offs by financial institutions could reach $400 billion by the end of 2008

And the 1^st quarter earnings reporting period did not seem to get off to a good start, a lot of disappointing earnings, losses, and warnings of losses so far.

It was indeed a heavy load of economic worries. Yet they slid off the back of the stock market without leaving so much as a scratch. As mentioned, the Dow closed up 3.2% for the week. The S&P 500 closed up 4.2%, and the Nasdaq up 4.8%

The markets ability to climb such a wall of worry, especially its lack of concern over Friday's employment report, was impressive. But the continued mediocre volume indicates it wasn't new sideline money flowing in.

Was it just the temporary influence of the automatic in-flow of money in the market's brief 'monthly strength period'? Or was the market's early March low the launching platform for a sustainable rally for a change?
Stay tuned!

The only thing about which I disagree with Harding is his description of the volume being "mediocre." For the past two weeks NYSE volume has really sucked, but has just sucked on the Nasdaq.

[zoog]

Re: Bullish Information Re. Hulbert Recession Over?

Jim, don't give up, people read your sticky thread. I guess i's politically incorrect to admit so. As for the short lived recession theory, I love it. I felt for a long time this this 2007/2008 crisis is either 1990-style, short lived, "undeclared" recession (that was bad real estate wise), or a near recession episode like 1997-1998. Long term, big and protracted recession is unavoidable, but it will take a couple more years for the perfect storm to emerge and sink the US and global economies.

Hey Jim I always check the Bullish and Bearish threads when something new is posted.

friendly_jacek, I had to hunt around to find an old post I made, July of last year:

There's still talk out there that the stock market tends to do well in election years. Could that still be a possibility in the midst of such a recession?

My personal take on this has been to expect a relatively mild recession late this year, followed by a weak recovery next year, then followed by a serious crash say 2009 or so. But I'm just an armchair economist, so I trust iTulip analysis and forecasts more than my own.

As time went by and things got worse, I began to doubt my amateur prediction of the mild recession / nominal recovery / big recession. Sometimes, when the market has a notable up day like yesterday, I lean back towards this theory. Bottom line is, I'm not going to start my own website and make confident predictions anytime soon! But as iTulip says about constantly checking and rechecking their theory and for any indication that the situation has changed, I think it is always beneficial to read what other people are saying out there.

[Jim Nickerson]

Re: Bullish Information Re. Hulbert Recession Over?

Jim, don't give up, people read your sticky thread. I guess i's politically incorrect to admit so. As for the short lived recession theory, I love it. I felt for a long time this this 2007/2008 crisis is either 1990-style, short lived, "undeclared" recession (that was bad real estate wise), or a near recession episode like 1997-1998. Long term, big and protracted recession is unavoidable, but it will take a couple more years for the perfect storm to emerge and sink the US and global economies.

jacek,

Theories are one thing, data that are collected and analyzed by presumably credible sources are another. TrimTabs, for reasons that I cannot defend (I guess it is just exposure to I think Biederman on TV over the years when I used to watch it seemed to be credible) is credible. If data indicate something, then it's worth in my opinion paying attention to them--despite their going against some conventional wisdom.

It's my impression that the bearishness that exists on iTulip should bring forth some sort of comment such as Hulbert's report has got to be pure horseshit, and in fact I recognize TrimTabs could be totally wrong.

[friendly_jacek]

Re: Bullish Information Re. Hulbert Recession Over?

http://www.marketwatch.com/news/stor...8F6D9641CBE%7D

Probably most people would give this a thread of its own, but what the hell, if people don't read this thread and as result miss something that might be important, so be it.

MARK HULBERT
Good and bad economic news
Commentary: TrimTabs says it's a recession, but may be ending

By Mark Hulbert, MarketWatch
Last update: 11:29 p.m. EDT April 1, 2008

Jim, don't give up, people read your sticky thread. I guess i's politically incorrect to admit so. As for the short lived recession theory, I love it. I felt for a long time this this 2007/2008 crisis is either 1990-style, short lived, "undeclared" recession (that was bad real estate wise), or a near recession episode like 1997-1998. Long term, big and protracted recession is unavoidable, but it will take a couple more years for the perfect storm to emerge and sink the US and global economies.

[tree]

Re: Bullish Information

Sorry, but in my humble opinion, the "if you can't beat 'em, join 'em" philosophy is what's helped get us into the terrible mess we're in now. That's a race to the bottom, with a dead end. :eek:

[Jim Nickerson]

Re: Bullish Information Re. Hulbert Recession Over?

http://www.marketwatch.com/news/stor...8F6D9641CBE%7D

Probably most people would give this a thread of its own, but what the hell, if people don't read this thread and as result miss something that might be important, so be it.

MARK HULBERT
Good and bad economic news
Commentary: TrimTabs says it's a recession, but may be ending

By Mark Hulbert, MarketWatch
Last update: 11:29 p.m. EDT April 1, 2008

ANNANDALE, Va. (MarketWatch) -- TrimTabs, the investment research firm in which Goldman Sachs Group Inc. in February became a minority shareholder, has both good and bad news about the U.S. economy.
See story about Goldman acquisition

Let's start with the bad news: Not only is the economy in a recession, according to TrimTabs, it has been in one for six months now. The only reason that this isn't more widely recognized is that it takes months, if not years, for the government to officially confirm that a recession has started.

Now the good economic news from TrimTabs: There is a distinct possibility that the economy has already emerged from the recession, or is about to.
TrimTabs bases this relatively cheerful assessment on an analysis of daily income tax withholdings from the U.S. Treasury. According to Madeline Schnapp, director of macroeconomic research at TrimTabs, withholdings during March were 4.1% higher than one year ago.

According to an econometric model that TrimTabs has devised based on the Treasury's withholding data, Schnapp is estimating that the U.S. economy added 48,000 jobs in March. That's not spectacular job growth, to be sure, but better than the diminution in total employment that TrimTabs believes occurred in previous months.

Schnapp hastened to add that we should not expect this job growth to show up in the employment numbers that will be released this Friday by the government's Bureau of Labor Statistics. That's because, she said, the bureau uses a "backward-looking methodology (that) usually misses economic turning points."

In fact, Schnapp is predicting that the bureau on Friday will report that the economy lost between 75,000 and 100,000 jobs in March. In effect, TrimTabs is warning investors not to be overly concerned about such numbers, should the bureau report them to be this bad.

The daily tax withholding data from the Treasury Department is not the only reason that Schnapp believes we should ignore the bureau's numbers.
Another is the TrimTabs Online Job Postings Index, which the firm describes as a "proprietary measure of online job availability." According to Schnapp, this index bottomed in early January and rose 1.2% in the past four weeks. She argued that "if the economy were collapsing, this indicator would be dropping like a rock, just like it did in 2000 and 2001."

Though the Hulbert Financial Digest does not track TrimTabs, it would appear to have navigated the market's gyrations in recent years quite well. When I last wrote about its jobs growth projections, in May 2005, the firm was aggressively bullish, recommending that clients be 200% long - fully margined, in other words. That was a good time to be bullish, as we may recall. See May 2005 column

The firm turned bearish Oct. 15, within shouting distance of the market's top. They remained bearish until March 23, when the firm turned neutral, and on March 31 it became moderately bullish, recommending an equity exposure level of 50%.

What would it take for the firm to recommend a higher exposure level?
Schnapp, in an interview, indicated that one factor that would likely lead her firm to become more bullish would be a marked increase in share buyback activity among U.S. corporations.

Even absent such a turn of events, however, Schnapp is willing to say that "once panicked investors realize that their fears of a deep and prolonged recession are not materializing, U.S. stock prices could shoot up very quickly."

[Jim Nickerson]

Re: Bullish Information Re: Hulbert Again

http://www.marketwatch.com/news/stor...t=MostReadHome

Here is a link to an article that zoog just mentioned on another thread.

MARK HULBERT
Dow 16K?
Commentary: Index could be at 16,000 by year end, Richard Band says

By Mark Hulbert, MarketWatch
Last update: 11:29 p.m. EDT March 27, 2008

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To be sure, Band wrote that on Tuesday night, and since then the Dow Jones Industrial Average has dropped 230 points.

Band continued: "We're in a critical stage for stocks right now, what technical analysts call the 'right shoulder' of a head-and-shoulders bottom. The left shoulder formed on March 10, when the Standard & Poor's 500 index touched its closing low for the year (so far) at 1273.37. The upside-down head came on March 17, when the index broke to a new low intraday but finished at 1276.60, slightly above the March 10 close. Now we're sliding down again to complete the right shoulder of the pattern. If all goes well, the S&P should remain comfortably above the two previous closing lows. Then we can rocket higher in April."

Band adds that when the right shoulder of a head-and-shoulders bottom is forming, "the biggest temptation for investors is to throw up their hands and say, 'This market will never go up. It's doomed.' Don't make that mistake. A very powerful and durable rally is in the works. But it may need another couple of days to lift off. Hold the fort and keep the faith!"
Band is recommending several exchange-traded funds and one open-end mutual fund for subscribers who want to increase their equity exposure: The iShares Russell 1000 Growth Fund (IWF), EEM, and Selected American Shares (SLASX: Selected American Shares

I'm not putting this here to stick it in the craw of anyone who chooses to belittle those who rely upon technical analysis as part of their method of assessment of markets. The word "faith" in my opinion has no place in making market decisions. Hulbert's points of this guy's track record are worth considering. Band's record does not guarantee he will be correct on this call.

[Jim Nickerson]

Re: Bullish Information Re. Hulbert on gold

http://www.marketwatch.com/news/stor...A6D99E48255%7D

Golden correction
Commentary: Gold timers continue their retreat to cash, a good sign
By Mark Hulbert, MarketWatch
Last update: 12:01 a.m. EDT March 26, 2008

ANNANDALE, Va. (MarketWatch) -- The evidence continues to mount that gold's spectacular plunge in the past week was a mere correction in an ongoing bull market.


Just take what happened on Tuesday, when gold bullion jumped by more than $16 an ounce. Far from becoming more bullish, the average gold-timing newsletter tracked by the Hulbert Financial Digest reacted by becoming markedly more bearish.

That's a very good sign, according to contrarian analysis, because it suggests that there is a substantial wall of worry out there for the bull market to climb.

Consider the latest readings of the Hulbert Gold Newsletter Sentiment Index (HGNSI), which reflects the average recommended exposure to the gold market among a subset of short-term gold timing newsletters tracked by the Hulbert Financial Digest. The HGNSI ended the day Tuesday at 11.5%.

That represents a decline of 23 percentage points for the day alone. And it is 54 percentage points below where this sentiment index stood as recently as last Tuesday, one week ago.

In fact, the last time the HGNSI was as low as it is today was at the end of this past November, when gold bullion was trading for around $785 an ounce, or about $150 an ounce less than where it is today.

In other words, the past week's correction has so spooked investors that they are just as bearish today as they were when bullion was a whole lot lower.

Rapid retreats to the exits are not usually seen at major market tops. At such times, according to followers of contrarian analysis, the typical reaction is to treat any pullback as a buying opportunity. Far from believing that the decline is the beginning of the end, advisers tend to consider it to be the pause that refreshes.

Perhaps the best illustration of this contrarian pattern in recent times is what happened to sentiment among stock market timers at the top of the market in March 2000, just as the Internet bubble was bursting. In the wake of the market's first 10% decline off its all-time high, the average short-term stock market timer tracked by the Hulbert Financial Digest was more bullish than he was at the top.
Now that's stubborn bullishness.

And it's anything but what we're seeing now in the gold market.

[Jim Nickerson]

Re: Bullish Information Re. Paul Kasriel perhaps bullish.

I'm not sure what to make from the above, but how about the recent poll from Yahoo Finance (great tool from a contrarian point of view?):

With the stock market showing renewed strength is it safe to buy?
	Yes. We've bottomed. 25% Stocks will trade sideways. 31% No. This is a head-fake. 44% 130205 Votes to date

All I took from Kasriel's piece is that he offered an opinion of what could contribute to an upward move of markets.

The yahoo poll means nothing to me unless one has data from other periods with which to compare the current levels of opinion. If you look at the II sentimental data from last week in a vacuum, at least to me it would be meaningless. Comparing it to previous extremes, it doesn't strike me as meaningless.

[friendly_jacek]

Re: Bullish Information Re. Paul Kasriel perhaps bullish.

http://www.safehaven.com/article-9783.htm

Fairly long article in which Kasriel discusses issues of debt and savings in households which leads to his conclusion:

I'm not sure what to make from the above, but how about the recent poll from Yahoo Finance (great tool from a contrarian point of view?):

With the stock market showing renewed strength is it safe to buy?
	Yes. We've bottomed. 25% Stocks will trade sideways. 31% No. This is a head-fake. 44% 130205 Votes to date

[Jim Nickerson]

Re: Bullish Information Re: Mark Hulbert

http://www.marketwatch.com/news/stor...3AF29E27A87%7D

MARK HULBERT 3/25/08
Was that the bottom?
Commentary: Contrarians growing more confident that bottom has been seen

ANNANDALE, Va. (MarketWatch) --

Was the Dow's March 10 closing low of 11,740.15 the final low of the decline that began last fall?

That is the $64,000 question.



Contrarians, for their part, detect mounting evidence that it was. Though the Dow Jones Industrial Average is now more than 800 points higher than it was at that low, the mood among stock market timing investment newsletters remains almost as pessimistic now as it was then.

That suggests a stubbornly held bearishness among the editors of stock market timing newsletters. That in turns means that there is precisely the kind of wall of worry that strong rallies like to climb.

Consider the Hulbert Stock Newsletter Sentiment Index (HSNSI), which reflects the average recommended stock market exposure among a subset of short-term market timing newsletters tracked by the Hulbert Financial Digest. As of Monday night, the HSNSI stood at minus 22.5%.

That means that, on average, the editors of short-term market timing newsletters are recommending that their clients allocate 22.5% of their equity portfolios to going short. That's an aggressive bet that the stock market will fall.

That aggressively bearish bet is one of the reasons that contrarians are bullishly inclined right now. But it is not the only reason.

Another one: The HSNSI has barely budged during the nine-trading-session rally that has added the more than 800 points to the Dow. At the March 10 bottom, in fact, the HSNSI stood at minus 25.9%. In other words, despite the significant rally since then, the editor of the average market timing newsletter has increased his exposure (that is, reduced his allocation to going short) by just 3.4 percentage points.

To put that puny difference in perspective, consider what happened to the HSNSI in the wake of the stock market's rally off its January 22 low. In the initial eight days of that rally, which tacked nearly 800 points onto the Dow, the HSNSI jumped more than 22 percentage points.

That relatively quick jumping back on the bullish bandwagon was one of the reasons that, a little more than one month ago, I argued that the retest of the January lows was likely to fail. See Feb. 19 column

The editors of stock-market-timing newsletters have, on balance, reacted far differently this time around, and for that reason the rally would appear to be built on a markedly more solid sentiment foundation.

[Jim Nickerson]

Re: Bullish Information Re. High level of mutual fund cash

http://www.bloomberg.com/apps/news?p...gUE&refer=home

Mutual Funds Abandon Stock Market as Volatility Jumps (Update4)

By Eric Martin and Alexis Xydias
March 24 (Bloomberg) --

Mutual funds are selling stocks and hoarding cash just as trading surges to a record and prices grow more volatile than at any time since the Great Depression.
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Mutual fund managers who invest for pension accounts, insurance companies and individuals raised the cash they held to 4.9 percent of client assets this month, according to Merrill. The last time the level was higher was in March 2003, after the S&P 500 had lost almost half of its value from its 2000 peak.

[Jim Nickerson]

Re: Bullish Information Re. Paul Kasriel perhaps bullish.

http://www.safehaven.com/article-9783.htm

Fairly long article in which Kasriel discusses issues of debt and savings in households which leads to his conclusion:

The upshot of all this is that in the next several years, the U.S. is likely to experience not only sluggish growth in homebuilding, but also very sluggish growth in the demand for home furnishings and other consumer discretionary goods and services. It very well could be that instead of U.S. corporations being the biggest buyers of U.S. corporate equities, U.S. households could become the biggest buyers. Similarly, instead of foreign central banks continuing to be big buyers of U.S. Treasury debt, U.S. households could take their place - i.e., after the yield on Treasury securities rises above the U.S. consumer inflation rate.

[Jim Nickerson]

Re: Bullish Information

Jim, good job on the timing of this immediate bottom. This type of the market with a lot of uncertainty and unknowns and investors oscillating between euphoria and fear is a prime example how sentiment trading can shine. Although I have to admit that it has been hard to figure out selling points based on sentiments alone in the last 4 months. Jim, what is your target in this rally?

f_j,

If there is any benefit to this thread, I hope some beside you and me are able to find it to his/her advantage.

I don't have a target, maybe I should, but I don't. What I would like is to see this rally turn into something significant, and then ride it until I think it has probably reversed. I have no idea if that will happen and if it were to, when a reversal will be. I try to use some percentage of loss as a point at which I will, may, should consider closing a position. I don't generally enter a trade with the notion that it will be for only a fews days, the exception being if the position suddenly, definitively moves against my making a profit.

Unless the move were to go up enough to seriously affect sentiment which I think takes months generally, any exit before such an extreme might be reached will be based as I wrote above. Sorry I can't tell you where it might end, but you know that.