Bullish Information

[friendly_jacek]

Re: Bullish Information

Since this forum is overflowing with bearish sentiment, this is an advice for a contrary investor from HS Dent (dated yesterday):

"This looks like an extraordinary buy opportunity, as the Dow could advance 4000 - 5000 points plus in less than a year, given how oversold stocks are. We would advise buying into this next wave down, rather than waiting for a more clear bottom, as the markets could reverse very quickly when they do bottom. Hence, it's best to be a bit too early than too late."

Dent's advice has been very accurate since 2002. And he actually advised to sell equities on 11/5, advice that I ignored. Nevertheless, I have been buying more equities in the last several days.

[Jim Nickerson]

Re: Bullish Information

Jim, maybe you are right and my neuronal network = brain is wired incorrectly (that would explain a lot). There is a whole more selling than I envisioned a few days ago. However, the selling today was totally irrational as the loosing dollar should prop the US equity. Thus, it was a good buying opportunity again. Now, for full disclosure, my interests are international and emerging markets rather than US equities, but all equities are strongly correlated now.

I'm not alone with my bullish bias now (although it's hard to find such company these days which should be telling from contrarian point of view). The link below is regarding the highly accurate Morgan Stanley’s European strategist being very bullish now:
http://ftalphaville.ft.com/blog/2007...unruffled-man/

fj,

Below is another bull, and Sullivan has been correct in having stuck with this market since April 2003, based he says on his "proprietary indicators." Only Sullivan and someone omniscient might know what those are.

The Actual Cash Account lost 2.63% and is currently dead even since the recent buy signal on Oct. 9th. If you missed the buy signal, todays pullback represents a good opportunity to take positions. The same goes for the Aggressive Account which loss 3.07% and is now down 0.61% since the buy signal.



Note: Both of our real money accounts are holding up much better then the overall market in that the benchmark S&P 500 has lost 4.95% over the same time frame.



With our models in positive territory we remain in the bullish camp. It is our feeling that todays pullback, represents a buying opportunity.

I believe I recounted Sullivan's new buy signal on 10/8/07 back a few posts.

One thing my data show is that there now have been three 90% down days in NYSE volume and points according to the method of Paul Desmond.

Richard Russell pointed out tonight that there is "half of a Dow Theory Sell signal" with the DJT having closed today below 4672.37, BUT he also notes that such a close is meaningless unless it is confirmed by the DJI closing below it August lows of 12845.78.

The three 90% down days on 10/19, 11/1/07, and today are a rather decent warning that more downward action may be in the offing.

The biggest thing that would make me reverse my bearish positions is two 90% up days in something less than a month, and perhaps some other indicators which aren't secrets, but which I don't want to think about just now.

[friendly_jacek]

Re: Bullish Information

Jim, maybe you are right and my neuronal network = brain is wired incorrectly (that would explain a lot). There is a whole more selling than I envisioned a few days ago. However, the selling today was totally irrational as the loosing dollar should prop the US equity. Thus, it was a good buying opportunity again. Now, for full disclosure, my interests are international and emerging markets rather than US equities, but all equities are strongly correlated now.

I'm not alone with my bullish bias now (although it's hard to find such company these days which should be telling from contrarian point of view). The link below is regarding the highly accurate Morgan Stanley’s European strategist being very bullish now:
http://ftalphaville.ft.com/blog/2007...unruffled-man/

[Jim Nickerson]

Re: Bullish Information

After studying the charts for a few days, I concluded that 10/19/07 was a starting day in a new leg up in equities and a leg down in USD, JPY, and bonds. My "neuronal network" told me this after analysis of current market sentiment, bond yield, and credit spread. Thus, I have no links to offer. The leg may last 2-3 months before another bout of heavy equity selling.

I still have no idea when to jump back into gold and oil that I sold recently due to the extreme surge and negative COT. Anyone care to agree or disagree? Any thoughts on commodities timing?

f-j,

Seriously, what is a "neuronal network" if you can take time to explain or direct me to an explanation?

[friendly_jacek]

Re: Bullish Information

DJI is down 371, US$ Index up .21, FXY is up .74, and 30-yr bond up 1 27/32.

I know Jim. I used this as an opportunity to sell JPY, cover shorts and buy some equity (since I missed the 10/19 turn). My timing could be off a few days, so there could be some more selling.

[Jim Nickerson]

Re: Bullish Information

After studying the charts for a few days, I concluded that 10/19/07 was a starting day in a new leg up in equities and a leg down in USD, JPY, and bonds. My "neuronal network" told me this after analysis of current market sentiment, bond yield, and credit spread. Thus, I have no links to offer. The leg may last 2-3 months before another bout of heavy equity selling.

I still have no idea when to jump back into gold and oil that I sold recently due to the extreme surge and negative COT. Anyone care to agree or disagree? Any thoughts on commodities timing?

So what is a "neuronal network"?

With a few minutes til market closes today the DJI is down 371, US$ Index up .21, FXY is up .74, and 30-yr bond up 1 27/32.

f-j, perhaps you had the polarity of the plug reversed for whatever is your machine=neuronal network.

I would watch gold and oil until they go down and buy some then, seriously, and the same for commodities.

[friendly_jacek]

Re: Bullish Information

After studying the charts for a few days, I concluded that 10/19/07 was a starting day in a new leg up in equities and a leg down in USD, JPY, and bonds. My "neuronal network" told me this after analysis of current market sentiment, bond yield, and credit spread. Thus, I have no links to offer. The leg may last 2-3 months before another bout of heavy equity selling.

I still have no idea when to jump back into gold and oil that I sold recently due to the extreme surge and negative COT. Anyone care to agree or disagree? Any thoughts on commodities timing?

[Jim Nickerson]

Re: Bullish Information

This article summaries well my views on the upcoming recession. I hesitated some whether this is bullish or bearish:
http://articles.moneycentral.msn.com...ssionSoon.aspx

f-j, interesting article.

I agree with you it is rather beallish, depending upon perhaps what an individual wants to happen vs. what other individuals think needs to happen.

[friendly_jacek]

Re: Bullish Information

This article summaries well my views on the upcoming recession. I hesitated some whether this is bullish or bearish:
http://articles.moneycentral.msn.com...ssionSoon.aspx

[Jim Nickerson]

Re: Bullish Information Re. Hulbert analyzing bullish timers.

MARK HULBERT 10/17/07
The best vs. the rest
Commentary: Top letters did good job anticipating popping of Internet bubble

http://www.marketwatch.com/news/stor...C36B40%7D&dist=

Two of the five market-beating newsletters in March 2000 were outright bearish on the stock market, and a third was only moderately bullish; the remaining two were bullish. The average recommended equity exposure among the five was just 40% in March 2000. Not bad.

In contrast, the current average recommended exposure among the top market timing newsletters is more than twice as high, at 86%.
Another telling contrast comes from comparing the top market timers with all the other newsletters that the Hulbert Financial Digest monitors. In March 2000, the average recommended equity exposure among all monitored newsletters was 68%, 28 percentage points higher than the average among the top timers.

So the best were far less bullish than the rest.

Today, in contrast, the average recommended exposure among all monitored newsletters is 64%, or 22 percentage points less than the average among the very best timers. So the best are now far more bullish than the rest.

The bottom line? The top timers' current bullishness is something deserving of our serious consideration.

Richard Russell a few days back sold, he said, his postion in Diamonds (DIA) based on his analysis of DJI point and figure chart breakdown. He's looking for a correction--whatever that means, he has not offered a suggestion of how low the market might "correct."

Personally, I am bearish on equities, but then I have been for several years except for intermittent lapses.

[GRG55]

Re: Bullish Information Re:Canadian oil sands...

From the Toronto Globe and Mail (otherwise known as the Grope and Flail). The penultimate paragraph is classic G&M. Although the figure of 40% of global traded oil is about correct, the fact is the Strait handles only about 25% of total daily global consumption, which I think is the more important statistic. Further, the implication that somehow Iran bordering the strait is some sort of security threat should be tempered with the fact that China supplied the current surface-to-ship missile systems to Iran, and they are not likely to be arming a country that would use the stuff to block their vital oil supplies through the strait. Talk of Iran's threat to the strait are vastly overblown IMHO.

Oil sands as an industry saviour?
ERIC REGULY
From Friday's Globe and Mail
October 12, 2007 at 6:11 AM EDT

ROME — What does the world outside of Canada think of Alberta's mighty oil sands? In three words, not so mighty.

We'll know more about the global musings on the oil sands on Nov. 7, when the International Energy Agency releases its annual World Energy Outlook in Paris. This door-stopper is the IEA's flagship publication, is typically 600 pages long and is considered among the most credible analyses of mid- and long-term energy demand and supply scenarios.

The theme of this year's World Energy Outlook is surging Chinese and Indian demand and how it will be met (or not). The oil sands, relatively speaking, will probably not get much ink in the report. And that's the point. The IEA doesn't believe the oil sands, in spite of their rapid growth, will make anything more than "an important dent" in the global oil market - this from an IEA official who did not want to be named ahead of the report's publication. On the supply side of the equation, what the IEA cares about most is OPEC production, with special attention on Iran, the potential target of American fighter-bombers (more on Iran in a moment).

"Dent" status is not what Alberta and the rest of Canada like to hear. In Alberta, the gucky oil sands have become the glamorous industry as conventional oil and natural gas production wanes. Suncor, Syncrude and the other big oil sands players are promoted as phenomenal Canadian success stories. When he's on foreign trips, Prime Minister Stephen Harper touts Canada as an "emerging energy superpower," as if it were the next OPEC. It's a misleading, extravagant and potentially dangerous claim. Canada will not save the world from oil shortages and the numbers tell the story.

Currently, global oil demand is about 85 million barrels a day. The oil sands produce about 1.2 million barrels a day, or 1.4 per cent of the total. The figure is small, though not insignificant. Of course, oil sands production is rising as tens of billions of dollars flow into new projects. The Canadian Association of Petroleum Producers (CAPP) has said the oil sands will pump out as much as four million barrels a day by 2020. That's equivalent to a meaningful 4.7 per cent of current daily production.

There are a couple of big problems with the four-million-barrel output figure. The first is that even as oil sands' production soars, so does global oil demand. Energy agencies and oil companies have predicted a demand figure of about 110 million barrels a day by 2030. It might go higher, depending on the oil slurp-a-thon in China and India. China alone is putting 14,000 new cars on the road every day. If 110 million barrels a day proves accurate, Alberta's share (assuming daily production of four million barrels) falls to 3.6 per cent.

The second is that CAPP's four-million-barrel figure may be ambitious. The new World Energy Outlook will probably pencil in a smaller number. Why? Because the oil sands are probably the world's most expensive oil production. As oil prices rise, so do costs. In the oil sands, natural gas is burned to generate the steam required to heat the bitumen in the reserve, allowing it to be pumped to the surface. Roughly speaking, it takes the equivalent of one barrel of energy to produce three barrels of oil sands oil.

The oil sands' other big problem is environmental. In the surface mining operations, it takes about 10 barrels of water to produce one barrel of oil. For the underground recovery operations, the figure is two to one (less water is used underground because it's recycled). Then there is the carbon dioxide output. The industry will get hit with carbon taxes. It's just a question of when.

The point being that with exceedingly high development, operating and environmental costs, production increases may happen more slowly than Alberta expects. If that happens, OPEC, not the oil sands, will be relied upon to save the oil markets. As conventional fields outside of OPEC, such as the North Sea, go into irreversible decline, OPEC's share of conventional output will rise. Almost every serious energy supply forecast sees OPEC supplying about half the global oil demand in 2030 or so.

Which brings us to Iran and why the IEA and European governments are focusing on it, not the oil sands. Iran is OPEC's second-biggest exporter and has the world's second-largest proven reserves of natural gas, after Russia. Iran also occupies the north shore of the narrow Strait of Hormuz, through which about 40 per cent of the globally traded oil supply flows by tanker ship. Iran's nuclear ambitions have already resulted in sanctions against the country, constraining the capital inflows needed to keep the Iranian oil fields alive and well. At worst, a war could substantially reduce or even eliminate Iranian oil exports. Imagine what that would do to the price in a market where the slightest disruption can send the price soaring.

Forgive the world outside of Canada and the IEA for not blowing toward Alberta. At this point, the oil sands just don't matter that much.

[GRG55]

Re: Bullish Information Re:International Energy Agency on oil inventories...

From the FT:
IEA warns on falling oil inventories
By Javier Blas in London
Published: October 11 2007 15:04 | Last updated: October 11 2007 15:04

The International Energy Agency, the western countries’ energy watchdog, on Thursday warned of rapidly falling crude oil and products inventories ahead of the peak demand winter season.

The watchdog said that supplies will get “tighter this winter” as developed countries’ inventories fell at the end of August to below the five-years average, to 53.5 days of forward consumption. Inventories were at 55 days on demand in the second quarter.


“Those stocks are clearly tighter than they have been for some time, but what is driving market expectations and therefore prices is the lack of confidence that they will be replenished,” the IEA said.

The watchdog has asked the Organisation of the Petroleum Exporting Countries, the oil cartel, to boost its supplies to build up inventories. Crude oil and products inventories usually build in the third quarter ahead of the winter, but so far they have fall by 360,000 barrels a day.

Link to article:
http://www.ft.com/cms/s/0/8258ed4e-7...nclick_check=1

[friendly_jacek]

Re: Bullish Information

The smart money continues to be very bullish:
http://www.marketwatch.com/news/stor...697C4890E00%7D

I personally trimmed my exposure by removing leverage recently, but missed some opportunities. I need to jump back into gold at the nearest buying opportunity!

[GRG55]

Re: Bullish Information Re: Weak Dollar Boosts Growth Without Fueling Inflation

Because of the headline, and the "weak $ is good for us" spin, decided to post this Bloomberg item on the Bullish thread. Ties to EJ's latest on US$ weakness...

Also last 2 paragraphs of the article...

"...Alison Moritz, tending a hot dog stand in San Francisco's Union Square, doesn't seem to agree as she happily watches her tip jar fill up with dollar bills and coins from European tourists.

"Before, they were not known for being good tippers,'' says Moritz, 23, who figures she's collecting as much as $90 a day at Stanley's Steamers Old Fashioned Beef Franks. "Now, they're throwing in $2 at a time.''

... bring a new meaning to Finster's "fleeing the dollar".

Weak Dollar Boosts Growth Without Fueling Inflation
By Matthew Benjamin and Vivien Lou Chen
Oct. 8 (Bloomberg) -- Treasury Secretary Henry Paulson, whose signature appears on every new dollar bill, may find the weak currency with his name on it helps the U.S. economy more than the strong one he publicly endorses.

The dollar's 8 percent slide during Paulson's 15 months in office is good news on the docks of Long Beach, California, where shipping containers are making their return trip to Asia filled with U.S.-made computer, auto and aircraft parts whose prices have become more competitive abroad. What's more, economists don't foresee the weaker currency generating higher import prices and accelerating inflation.

"The dollar is in a quasi-sweet spot,'' says Joseph Quinlan, chief market strategist at Bank of America Corp. in Charlotte, North Carolina. ``It's dropped enough that it's creating an earnings upside for U.S. multinationals, while I expect many foreign companies to hold the line on prices they charge U.S. consumers.''

Exports by General Motors Corp., Boeing Co. and other U.S. companies were up 11 percent in the second quarter from a year earlier, shrinking the nation's trade deficit in goods for the first half by $14 billion, to $405 billion, and helping the economy weather the housing bust.

According to estimates by Goldman Sachs Group Inc., that's the biggest improvement in 20 years; exports of goods grew more than twice as fast as imports in the first half of 2007.

Link to article:
http://www.bloomberg.com/apps/news?p...d=acan_4u7wIJI

[GRG55]

Re: Bullish Information Re: WSJ on Oil Inventory Trends...

Apologies for getting off-topic in the Bullish sticky thread, but I actually lived in Cushing until I was about 10 or so. We always heard during the Cold War our little town was a major target on the Soviet missile list, because of the confluence of transcontinental oil pipelines and storage tanks.

My mother often wryly referred to the sprawling fields of oil tanks as "our beautiful tank gardens".:p

Portland must be looking better and better, eh