Bullish Information

[Tet]

Re: Bullish Information Re. Mark Hulbert

Hulbert posted this Friday morning well before the markets opened at 9AM EDT 8/17/07

http://www.marketwatch.com/news/stor...C6997DCB220%7D

I would imagine we see a pretty quick 1,000 point gain on the DOW, probably quicker than the 21 trading days it took for the quickest 1,000 point gain the DOW has had. Market still has ten trading days to give the cows a little gain on their 401K's by the end of the month or that might create the herd heading in the wrong direction. Should be interesting.

[Jim Nickerson]

Re: Bullish Information Re. Mark Hulbert

Hulbert posted this Friday morning well before the markets opened at 9AM EDT 8/17/07

http://www.marketwatch.com/news/stor...C6997DCB220%7D

For those few of you who are not among the 18 million or so readers who have emailed me in recent days to remind me of how wrong I was, I argued then that the odds favored the market rallying, not falling further. See July 25 column

About the only thing I can say in my defense is that the jury is still out: I concluded the column by writing: "Odds favor that the market ... will trade at new all-time highs sometime in the next three months."

So, technically, we won't know until Oct. 25 that my prediction was wrong. And though new highs look awfully far off right now, I continue to believe that the odds favor a higher market over the next three months. Newsletter editors are significantly more pessimistic today than then, increasing the odds that already existed then that the path of least resistance for the market is up.

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. As of Thursday night, the HSNSI stood at minus 11.3%, which means that the average market timer that is part of the HSNSI is recommending that his clients allocate 11.3% of his equity portfolio to actually going short.

To put this consensus recommendation into perspective, consider that the lowest the HSNSI got to during this year's late-February-early March correction was 17.4%, or nearly 30 percentage points higher than where it stands today. Yet, despite the HSNSI being so much lower now than then, the Dow Jones Industrial Average is nearly 800 points higher.

This is very revealing. Usually sentiment rises and falls more or less in tandem with the market itself, with advisers becoming more bullish as the market rises and more bearish as the market falls. When sentiment trends significantly deviate from this general pattern, it means that advisers have become unexpectedly bullish or, as in the current case, exceptionally bearish.

That's good news from a contrarian point of view, since bull markets thrive on the kind of skepticism we are seeing right now.

Another historical contrast that puts the recent sharp drop in the HSNSI into perspective is with how it behaved following the top of the stock market in March 2000, just as the Internet bubble was bursting. When, several weeks later, the market was 10% below its high, the HSNSI was actually higher than where it stood at the top.

No one knew at the time, of course, whether that 10% decline constituted a mere correction or, instead, was the beginning of a multi-year bear market. But, in light of the stubborn bullishness that was being exhibited at the time by advisers, contrarians believed that we indeed were at the beginning of a major bear market.

They were right, needless to say.

Yet it is for the very same reasons that led them to be right then that contrarians today believe the recent decline is just a correction within a long-term bull market.

[Jim Nickerson]

Re: Bullish Information Re. Richard Russell

http://dowtheoryletters.com/ Subscription

8/17/07

The next chart is a daily chat of the widely-followed S&P 500. Note as of yesterday's close, the S&P came down almost to its previous March low. The market has become severely oversold, and was way overdue for a good rally. However, It's possible that a rally will simply form a right shoulder in what could be a huge head-and-shoulders pattern. That doesn't have to be, but I'm going to watch closely for this possibility.

A word about the rapidity of this decline. It's been surprisingly fast. Where ever this market is going, it's going in a hurry. Just a guess, but I had thought that this decline would last until at least October. If that's going to happen, the market will have to slow its descent in the form of a few good rallies, in other words, the market will have to "stretch out" its rate of decline.

[Edit JN:Sorry I could not import the $SPX stockcharts.com daily 1-year chart that he referenced. You can check out the chart at stockcharts.com.]

What Russell is pointing out is the technical possibility of a rally here to form the right shoulder of the pattern.

Such a move would not negate the possbilities of new lows later this year.

[Jim Nickerson]

Re: Bullish Information Re. Another Nickerson observation.

I think you hit the nail here. I have been studying market/investors emotions very closely for several months now, and the amount of bearishness is quite severe. One of the best tools is http://www.market-harmonics.com/free...nt/putcall.htm

Especially if you look up Rydex Nova/Ursa ratio, you will see that the sentiment is now as negative as on 9/11 or in 2000! There is a lot of money that can be made on short term recovery. For example I purchased FXI yesterday in early PM and made 10% on that bet. If you purchased GDX you would be up 6% today. However, after saying this, I have to admit that I am bearish longer term. We will likely enter a trading range and possible more selling.

It will remain to be seen if any nails have been hit on the head.

Your link is a decent link that I'll add to my bookmarks. If one looks at the Put/Call Volume Ratio -Equities chart, which I take to be at least saying it is looking at the same put/call data that I might be looking at, the numbers are significantly different from what I wrote. It does not show puts being greater than calls, though it does show a rise in the number of puts. I will stand by my statements based on my data that are acquired from http://www.cboe.com/data/mktstat.aspx.

[Jim Nickerson]

Re: Bullish Information Re. Another Nickerson observation.

Eh, -20% I can handle. I started my 401k not long before the tech bubble peak and then watched it flounder for the next two or three years before recovering even above zero. I learned that dollar-cost-averaging can take a long time to bear fruit.

It's looking ahead and imagining a steady general downward grind followed by, apparently, an 1987-style plunge that makes me wince. So I'm certainly bearish like most others here seem to be currently.

So that there is no obfuscation in how I am seeing the short term which I think is a month to several months, I am very bullish that the equity markets are setup to move higher. Such a move does not negate anything EJ has put forward recently about a lot of shit yet to be hitting the fan. I in no way personally discount anything he says--at least that I can think of. Perhaps being bullish right now is "playing in front of the steam-roller," he would have to address that.

To me the signals I pointed out have been good bullish signals heretofore, but that does not dictate that they will work this time.

I got a bit "whacked" over the last 2-3 weeks, i.e. I lost some money, but I think now I likely will get it back in the next few weeks. That's my bet.

People who are frightened about the future based on EJ's comments or any other commentary and are down for these past several weeks hopefully will have an opportunity to sell into strength over the near weeks to several months possibly if they wish to lighten up and prepare for something worse.

[friendly_jacek]

Re: Bullish Information Re. Another Nickerson observation.

I probably have read iTulip everyday for the last 16 months, and based on "feel" and perhaps poor recollection, I would say in the past week to 10 days there has never been as much bearishness on the site as in this time.

With regard to MM funds there might have been some panic even when there has been no serious evidence of money market funds being in trouble so far.

Some, seemingly young, guys have been worrying they have missed the Ka, and what to do about the Poom? I have "felt" a certain amount of serious worry.

I think there has been a peak--so far--here in bearishness.

I think you hit the nail here. I have been studying market/investors emotions very closely for several months now, and the amount of bearishness is quite severe. One of the best tools is http://www.market-harmonics.com/free...nt/putcall.htm

Especially if you look up Rydex Nova/Ursa ratio, you will see that the sentiment is now as negative as on 9/11 or in 2000! There is a lot of money that can be made on short term recovery. For example I purchased FXI yesterday in early PM and made 10% on that bet. If you purchased GDX you would be up 6% today. However, after saying this, I have to admit that I am bearish longer term. We will likely enter a trading range and possible more selling.

[zoog]

Re: Bullish Information Re. Another Nickerson observation.

Eh, -20% I can handle. I started my 401k not long before the tech bubble peak and then watched it flounder for the next two or three years before recovering even above zero. I learned that dollar-cost-averaging can take a long time to bear fruit.

It's looking ahead and imagining a steady general downward grind followed by, apparently, an 1987-style plunge that makes me wince. So I'm certainly bearish like most others here seem to be currently.

[Jim Nickerson]

Re: Bullish Information Re. Another Nickerson observation.

I've been on vacation this week (what a week to miss), and after frantically skimming through all the unread threads to try to catch up, I'd say you're right. Particularly bemusing to me was all the concern about the safety of money market accounts? I thought we weren't doomers? :confused: Of course, it's difficult to be bullish when my taxable investment account is negative 20%... :eek:

That's what I take to be bullish--such a story of woe, and you have my sympathy for how I imagine you feel.

"If you can keep you head when all about you are losing theirs."

[zoog]

Re: Bullish Information Re. Another Nickerson observation.

I probably have read iTulip everyday for the last 16 months, and based on "feel" and perhaps poor recollection, I would say in the past week to 10 days there has never been as much bearishness on the site as in this time.

With regard to MM funds there might have been some panic even when there has been no serious evidence of money market funds being in trouble so far.

Some, seemingly young, guys have been worrying they have missed the Ka, and what to do about the Poom? I have "felt" a certain amount of serious worry.

I think there has been a peak--so far--here in bearishness.

I've been on vacation this week (what a week to miss), and after frantically skimming through all the unread threads to try to catch up, I'd say you're right. Particularly bemusing to me was all the concern about the safety of money market accounts? I thought we weren't doomers? :confused: Of course, it's difficult to be bullish when my taxable investment account is negative 20%... :eek:

[Jim Nickerson]

Re: Bullish Information Re. Another Nickerson observation.

I probably have read iTulip everyday for the last 16 months, and based on "feel" and perhaps poor recollection, I would say in the past week to 10 days there has never been as much bearishness on the site as in this time.

With regard to MM funds there might have been some panic even when there has been no serious evidence of money market funds being in trouble so far.

Some, seemingly young, guys have been worrying they have missed the Ka, and what to do about the Poom? I have "felt" a certain amount of serious worry.

I think there has been a peak--so far--here in bearishness.

[Jim Nickerson]

Re: Bullish Information Re. Nickerson on the Market.

This is definitely a for-what-it's-worth contribution. I have not yet checked the sites I usually read for anything seemingly interesting that might represent bullishness.

Based on my own data collection, today 8/17/07 the NYSE had a 90% up day in both volume and points. Last summer during the decline there were three similar 90% up days following the low of the NYSE on 6/13/06. I was so convinced there would be a decline into the fall because of it being the 2nd year of the presidential cycle, that I totally rejected the +90% buy signal, and there were three of them from the low mentioned above until 7/19/07--just 19 market days. These +90% up days following on 90% down days constitute a buy signal if one wishes to acknowledge Paul Desmond's research on this indicator. If I recall, Desmond in Barron's rejected the validity of these buy signals because they followed so closely on several 90% down days. I believe he had some guideline that generally the 90% up days are good when about 30 days elapse from the previous 90% down day. Well, it turned out Desmond was very wrong, and I certainly was because of a preconceived notion of what I thought the markets should do.

I've noted somewhere here in the last couple of days, that the equity pull/call ratio had risen above 1.0 on 8/14,15,16. This is uncommon to rise that high, much less 3 days in a row. I personally interpret this datum to be a bullish sign on a contrary basis. I take it to denote significantly more fear than is normal for those trading equity options. Almost always this indicator shows a preponderance of bullishness, i.e. more calls than puts, thus a number below 1.0.

Based solely on these two indicators, I think the equity markets are in for a bullish run.

I welcome any dissents.

[Jim Nickerson]

Re: Bullish Information Re. Barton Biggs

Barton is getting to be an old fart, and on Bloomberg TV 9 min video, he thinks there will be a 3-5% SPX and 10% emerging market rally and then maybe a retest of these lows. He seems pissed off throughout the interview to have to be talking back to the talking heads.

Not worth a lot of time to watch in my opinion, but this link hopefully will take you there is you wish.

http://www.bloomberg.com/avp/avp.htm...vWxyFI6deM.asf

[Jim Nickerson]

Re: Bullish Information Re. Bullish hammers and doji?

Whatever a doji is. http://www.investopedia.com/terms/d/doji.asp

Martin Weinberg http://www.financialsense.com/Market/wrapup.htm

Looks at long term interest rates having bottomed and suggests they will go up--this would be consistent with future increased inflation.

What is a hammer? It is when a market or stock opens and closes in a narrow range, after a downtrend. There is a “tail” representing trading much throughout a lower range during the day. The longer the “tail,” the wider (and lower) the range of trading throughout the day. Higher volume (as shown in the Dow Jones Industrials), tends to confirm the bullish nature of a hammer. The bullish nature of the hammer such as the ones in the Dow and emerging market ETF would need to be confirmed. In the case of the Dow, confirmation would be a couple of ticks above the 200-day moving average.

Charts shown today with bullish hammers and increased volume in SML, $TRAN, EEM, DJI.

Also comments on HUI, $GOLD, BRK/A.

[Jim Nickerson]

Re: Bullish Information Re. The Chartist

http://www.thechartist.com/ Subscript required.

Thursday, August 16, 2007Stocks staged a dramatic comeback from what appeared to be another session of heavy losses. At its worst levels, the Dow was down more than 340 points, but by the close had cut its losses to only 15.69 points. On an intra-day basis, it was down 10.7% from its all-time high of 14,021.95 reached in July. One of the more noteworthy aspects of today's trading was the outperformance of the Russell 2000. The small-cap gauge finished up 2.3%. At its intra-day lows it was down 14% from its July high and unlike the Dow or S&P 500 it had already undercut its March low. It closed at 768 which is only 8 points above that key support level. One reason for the sharp reversal was the hope of a .50 point rate cut by the Fed in September. Countrywide Financial, the largest U.S. mortgage lender, was down 27% at one point today on bankruptcy rumors. It rallied to only down 4.74% on the rate cut news. We remain in the bullish camp...

So not everybody is bearish.

[Jim Nickerson]

Re: Bullish Information Re. Short Term Bullish

http://www.safehaven.com/article-8159.htm

Mike Burk Technical Market Report 8/11/07

This guy has more data and looks at it in more ways over longer periods than anyone else I have run across on the web.

This week's note has a lot of charts, and the chart that makes the most sense to me is the last one which measures OTC 10 day average of the absolute value of the percentage change. What I get from the chart is that spikes in the just mentioned variable fit nicely with lows in the Nasdaq Index.

My inclination (bet) is that we are going to see some rallying over the next few weeks.