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View Full Version : Economics I am calling an official "bull market"


petegz28
03-16-2010, 11:31 AM
Yes, yes, I know, the market has been going up for quite some time now. But many have seen it as nothing more than a retracement of a bear market. I am saying now those people are wrong. We are officially on our way in a long term bull market. Why? I will list my reasons:

1. The Advance\Decline line has continued to make higher highs and over the last 2 weeks has broken ou again to the upside.

2. Weekly charts are indicating another break out after a correction in January.

3. Probably the most significant, monthly charts of the SP500 are showing signs of continuing the trend. We are officially in overbought territory on the slow stochastics on monthly charts. That is a significant part of a long term bull market. If you look at any monthly SP500 chart you will see that during bull markets the slow stochastics hover in the overbought range throughout the move.

4. The SP500 tested it's 9-period moving average on a monthly chart and bounced off. That is a key sign that the trend is holding.

There are still risks. We have had light volume and the political environment is still causing some investors pause until they see how things shake out on the health care and bank regulatory fronts. We are also nearing resitance at 1200 on the SP500. That is the level to watch for now. If we break through that then everything should be confirmed that we are indeed in a long term bull market.

Brock
03-16-2010, 11:33 AM
Hopefully the Grease situation will straighten itself out.

petegz28
03-16-2010, 11:35 AM
Hopefully the Grease situation will straighten itself out.

Greece is no longer a factor in the market. They are done and taken care of as far as the market is concerned. It was just a blip on the radar screen overhyped by the news media.

Brock
03-16-2010, 11:40 AM
Greece is no longer a factor in the market. They are done and taken care of as far as the market is concerned. It was just a blip on the radar screen overhyped by the news media.

That's good then.

banyon
03-16-2010, 12:53 PM
The housing market/ new homes and stagnant employment and wages make me think we are looking at a slight double dip as far as the stock market. I say Dow 8500-9000 one more time and then we'll zigzag back up.

banyon
03-16-2010, 12:54 PM
Greece is no longer a factor in the market. They are done and taken care of as far as the market is concerned. It was just a blip on the radar screen overhyped by the news media.

That was a good chance to buy some NBG or something cheap and then sell it once the negative hype stoppeed.

fan4ever
03-16-2010, 01:00 PM
The housing market/ new homes and stagnant employment and wages make me think we are looking at a slight double dip as far as the stock market. I say Dow 8500-9000 one more time and then we'll zigzag back up.

Not even close to being an expert but I agree with this assessment...except I think heading back up will take a bit of time.

KC native
03-16-2010, 02:30 PM
I think you're way early. The fundamentals should be following along if we're in a bull market but they are still deteriorating and with all the headwinds that the economy faces I see a double dip recession as a 70% probability.

This market right now is characterized by marginally higher new highs and low volume. I think we'll get at least a 25% correction once the technicals flip.

Taco John
03-16-2010, 02:31 PM
I think it's foolish to call a "bull market" before this health thing is settled. If it passes, the market is going to retreat. Investors will take whatever profits they can and wait to see what comes next. If it fails, I can see the market rallying.

Silock
03-16-2010, 02:41 PM
I think it's foolish to call a "bull market" before this health thing is settled. If it passes, the market is going to retreat. Investors will take whatever profits they can and wait to see what comes next. If it fails, I can see the market rallying.

I agree with this assessment completely.

That's why I'm taking a bit of profit every day (but not too much) and buying on the pullbacks. Still have quite a bit of cash reserves, though (about 25% of my portfolio), waiting for a big drop so I can cash in.

Rain Man
03-16-2010, 06:03 PM
Hopefully the upcoming bull market will be good enough that my retirement accounts get back to where they were in 2007.

Rain Man
03-16-2010, 06:11 PM
Off topic, but I got a summary for one of my mutual funds a couple of weeks ago. It's an Eastern Europe fund that got nailed in the collapse, and it's still down some gawdawful amount like 30 percent. Other than this last year, I've pretty consistently added to it over a five-year period.

The year by year figures were something like this:

2006 - +10%
2007 - +10%
2008 - -60%
2009 - +80%

I'm looking at that, and I'm thinking, "There's no way that's right. I'm still down 30%, and that looks positive."

Then I thought about it. If you put in $10,000 in 2005, you're up to $11,000 in 2006, then a little over $12,000 in 2007. Then comes 2008, and bam - you're at $4,800 or so. 2009 comes along, and you make 80% on your $4,800, and you're at roughly $8,600, or down about 30% from where you started. But most people looking at those numbers are going to think that the fund's performance was decent.

They're accurately reporting the data, but it sure is misleading at first glance.

alnorth
03-16-2010, 06:30 PM
I'm looking at that, and I'm thinking, "There's no way that's right. I'm still down 30%, and that looks positive."

Then I thought about it. If you put in $10,000 in 2005, you're up to $11,000 in 2006, then a little over $12,000 in 2007. Then comes 2008, and bam - you're at $4,800 or so. 2009 comes along, and you make 80% on your $4,800, and you're at roughly $8,600, or down about 30% from where you started. But most people looking at those numbers are going to think that the fund's performance was decent.

They're accurately reporting the data, but it sure is misleading at first glance.

Yep, people who look at returns often underestimate how bad a decrease is. The opposite of -50% is not +50%, it is +100%.

Its why older people need to be careful. I can take high-flying risks now while I'm young with plenty of time to buy cheap shares after a hit, but when you get into the 50's and 60's, you gotta play some good defense.

KC native
03-16-2010, 06:41 PM
Off topic, but I got a summary for one of my mutual funds a couple of weeks ago. It's an Eastern Europe fund that got nailed in the collapse, and it's still down some gawdawful amount like 30 percent. Other than this last year, I've pretty consistently added to it over a five-year period.

The year by year figures were something like this:

2006 - +10%
2007 - +10%
2008 - -60%
2009 - +80%

I'm looking at that, and I'm thinking, "There's no way that's right. I'm still down 30%, and that looks positive."

Then I thought about it. If you put in $10,000 in 2005, you're up to $11,000 in 2006, then a little over $12,000 in 2007. Then comes 2008, and bam - you're at $4,800 or so. 2009 comes along, and you make 80% on your $4,800, and you're at roughly $8,600, or down about 30% from where you started. But most people looking at those numbers are going to think that the fund's performance was decent.

They're accurately reporting the data, but it sure is misleading at first glance.

Yep, people who look at returns often underestimate how bad a decrease is. The opposite of -50% is not +50%, it is +100%.

Its why older people need to be careful. I can take high-flying risks now while I'm young with plenty of time to buy cheap shares after a hit, but when you get into the 50's and 60's, you gotta play some good defense.

This is a perfect example of why people need to avoid anchor bias. You should never get married to the price you paid for an investment and should re-evaluate the case for holding an investment instead of looking at what you purchased an investment for and whether you can recoup your losses.

petegz28
03-16-2010, 10:33 PM
All I will say is a lot of you called the current rally a sucker's rally. Nevermind the market has made a great move during that whole time. THIS my friends, is how it works.

Wave 1=Everyone says it "isn't for real, it won't last, it's a sucker's rally".
Wave 2=the market has a correction.."See the market is going down again"
Wave 3=the market resumes it's uptrend and starts to break out. Now, the first half of wave 3 people still speculate it isn't real. The second half they figure out they are missing out and pour the money in.
Wave 4=correction that everyone buys cause they think they are "onto the market" by now.
Wave 5=Everyone who bought in waves 1, 2 and the first half of 3 start selling to everyone who bought the correction in wave 4. Thus you get the top and most of the people hang on our buy into wave 1 of the bear market. Then cry cause they lost their money and how they should have got in sooner and not held out for the top $.

KC native
03-16-2010, 11:40 PM
All I will say is a lot of you called the current rally a sucker's rally. Nevermind the market has made a great move during that whole time. THIS my friends, is how it works.

Wave 1=Everyone says it "isn't for real, it won't last, it's a sucker's rally".
Wave 2=the market has a correction.."See the market is going down again"
Wave 3=the market resumes it's uptrend and starts to break out. Now, the first half of wave 3 people still speculate it isn't real. The second half they figure out they are missing out and pour the money in.
Wave 4=correction that everyone buys cause they think they are "onto the market" by now.
Wave 5=Everyone who bought in waves 1, 2 and the first half of 3 start selling to everyone who bought the correction in wave 4. Thus you get the top and most of the people hang on our buy into wave 1 of the bear market. Then cry cause they lost their money and how they should have got in sooner and not held out for the top $.

:shake: So where are we on this then pete?

petegz28
03-17-2010, 12:01 AM
:shake: So where are we on this then pete?

My opinion is we starting wave 3.

Nightfyre
03-17-2010, 12:07 AM
I assume he thinks we are in Wave 3. I contend that equities are overpriced presently. Financials have been driving the upward momentum based on P/E speculation; however, these financials are just as, if not more fundamentally crippled than when the crisis began. They merely have the capacity to manipulate their earnings to show whatever they damn well please. Pull up a uniform bank performance report and tell me Wells Fargo merits a stock price on par with its five year highs given that they have 8.5% non-current loans to gross loans ratio. That 2.85% allowance for loan and lease loss is LOW relative to the risk in their asset portfolio. they have been dragging ass on provisions to save earnings and thus, their P/E ratio. Factor in their real estate owned and there is another 0.2% of gross loans. This doesn't even touch on the losses in foreclosure (which they are working through 9.5 billion in) or the restructure which, given the historical data, another 35% of which will be relabeled problems again within a QUARTER. These financials still have serious issues that equity investors seem to be glossing over, IMO.

KC native
03-17-2010, 12:13 AM
I assume he thinks we are in Wave 3. I contend that equities are overpriced presently. Financials have been driving the upward momentum based on P/E speculation; however, these financials are just as, if not more fundamentally crippled than when the crisis began. They merely have the capacity to manipulate their earnings to show whatever they damn well please. Pull up a uniform bank performance report and tell me Wells Fargo merits a stock price on par with its five year highs given that they have 8.5% non-current loans to gross loans ratio. That 2.85% allowance for loan and lease loss is LOW relative to the risk in their asset portfolio. they have been dragging ass on provisions to save earnings and thus, their P/E ratio. Factor in their real estate owned and there is another 0.2% of gross loans. This doesn't even touch on the losses in foreclosure (which they are working through 9.5 billion in) or the restructure which, given the historical data, another 35% of which will be relabeled problems again within a QUARTER. These financials still have serious issues that equity investors seem to be glossing over, IMO.

My thoughts exactly (and wells is supposed to be one of the good banks).

Nightfyre
03-17-2010, 12:16 AM
My thoughts exactly (and wells is supposed to be one of the good banks).

I initiated an order to short wells tonight. Then I cancelled it simply because I can't bring myself to invest in such an irrational market. Its too scary.

Chief Henry
03-17-2010, 07:46 AM
I initiated an order to short wells tonight. Then I cancelled it simply because I can't bring myself to invest in such an irrational market. Its too scary.

This...I've got only 20% of my $$$ in the market at this time. I'm in NO hurry.

The Mad Crapper
03-17-2010, 11:04 AM
The stock market is going to crash (again).

http://thepeoplescube.com/images/Obama_Copenhagen_160.jpg

petegz28
03-17-2010, 11:09 AM
This...I've got only 20% of my $$$ in the market at this time. I'm in NO hurry.

This is exactly the point I was making. I am depending on the masses such as yourself to come in over the next couple months when the market keeps going up and you realize you are missing out on the big move and finally make the plunge.

Fundamentals are great and I respect those who look at the market from a completely fundamental view. But the reality of the market is emoition and foresight. By the time fundamentals start justifying moves a lot of the move has already been made. Price action is price action. A point is a point. Up is up and down is down. There is what should be and what is.

You think fund managers are going to sit around while the market continues to go up? That will look real good on their statements when they show then underperforme the market by several percentage points.

I am not discounting your take as there is still and always will be risks in the market.

I am just saying what the charts tell me. We broke out again today on a daily basis above the January highs. Samething for the weekly charts. Same thing for the monthlly charts.

petegz28
03-17-2010, 11:11 AM
This...I've got only 20% of my $$$ in the market at this time. I'm in NO hurry.

As of this point I disagree. From where I stand I think we will make a run to 1200 on the SP500 then probably retrace back down to the 1070-1080 level before we resume.


The wildcard right now is the health care bill. That could pose lots of problems for the market but we will have to wait and see how it all plays out.

petegz28
04-12-2010, 08:45 AM
hmmm, SP500 pushing 1200......keep doubting me

Silock
04-12-2010, 08:49 AM
Been a great couple of weeks. I have made soooo much more money in the last two weeks than I have in the last couple of months, it's been REALLY refreshing.

bsp4444
04-12-2010, 08:58 AM
I'll preface this with the fact that I am a liberal, but this is not being sarcastic, just inquisitive...has the health care bill affected the market, or not?

Silock
04-12-2010, 09:02 AM
I'll preface this with the fact that I am a liberal, but this is not being sarcastic, just inquisitive...has the health care bill affected the market, or not?

In the sense that it gave some certainty to an uncertain market, yes. But the market was looking to go up. It just needed to know exactly which way things were going to play out. Once that happened, it was full steam ahead.

petegz28
04-12-2010, 09:24 AM
I'll preface this with the fact that I am a liberal, but this is not being sarcastic, just inquisitive...has the health care bill affected the market, or not?

I think the effects of the health care bill will not show for some time. Once things are digested and piece parts start hitting the economy.

banyon
04-12-2010, 11:57 AM
I'll preface this with the fact that I am a liberal, but this is not being sarcastic, just inquisitive...has the health care bill affected the market, or not?

Most of the health stocks got a significant boost, even though I was told by many conservatives that they would go out of business.

Silock
04-12-2010, 02:51 PM
Most of the health stocks got a significant boost, even though I was told by many conservatives that they would go out of business.

Well, when the gov't is forcing people to buy them . . .

ClevelandBronco
04-12-2010, 02:51 PM
Most of the health stocks got a significant boost, even though I was told by many conservatives that they would go out of business.

Were they still telling you that after it became apparent that the "health care" bill was nothing more than a forced giveaway to the health insurance companies?

banyon
04-12-2010, 03:41 PM
Well, when the gov't is forcing people to buy them . . .

Right. That's why when we were having the debate, I didn't support the bill for the opposite reason, that it was a handout to insurance companies. In hindsight, the market appears to agree with my prior assessment.

banyon
04-12-2010, 03:41 PM
Were they still telling you that after it became apparent that the "health care" bill was nothing more than a forced giveaway to the health insurance companies?

In some cases, yes.

petegz28
04-12-2010, 03:55 PM
I've been telling people to start working back into stocks since June of 09. With the cautionary note that the move may not sustain given the economic and political outlooks. I made my offical call of a bull market after the SP500 hit 1150 then retraced back to 1050 and broke out above 11500 on 3/16/10 again. We touched 1200 today as I predicited and backed off, also as I predicted. Earnings start coming in after the market closes tonight so we shall see what happens. I would expect a retract back to 1100-1150ish sometime soon before we resume.

The SP500 has moved from rougly 670 to the 1190 level we are at now and the longer term technicals contiune to point in an upward trend. This month is proving to be significant as the +DMI on a monthly SP500 chart is starting to cross the -DMI for the first time since 12/08. Also on the monthly chart the MACD has contiuned to have the fast length clearly above the slow length though the indicator is still in negative territory. That is a good sign that the market clearly has a long way to go before we are overbought on a technical basis. Price action has April above the highs of March on a monthly chart as well. Another indicator that the market continues to want to go higher.

The ADX Trend indicator has been positive now on daily charts with a current reading of 29.28 and has begun to turn up on the weekly chart with a reading of 23.66. Anything above 20 indicates a trending market as opposed to a range boun market.

Most importantly the Advance\Decline line continues to make higher highs during this move. Another indication that people are buying more than they are selling.

jiveturkey
04-12-2010, 04:56 PM
I'll be honest, I don't follow the market that closely.

I do however look at my 401k statements and HO-LEE SHEET is it doing well. My financial adviser calls me every quarter to tell me how awesome I am and it appears that my retirement fund is outpacing the SP500. I win!

petegz28
04-12-2010, 09:50 PM
I'll be honest, I don't follow the market that closely.

I do however look at my 401k statements and HO-LEE SHEET is it doing well. My financial adviser calls me every quarter to tell me how awesome I am and it appears that my retirement fund is outpacing the SP500. I win!

Alcoa reported earnings this afternoon and missed estimates. Tokyo is down almost 1% right now. This might be the start of actually a needed correction. We touched 1200 in the SP500 today and then backed off. Or at least the SPY touched 120.04 (1204 in SP500 pts). I predicted that we would run to 1200 then probably back off some. I'd expect a down opening in the morning but we shall see how it plays out. Longer term I think we are headed higher though.

Silock
04-12-2010, 11:49 PM
Alcoa reported earnings this afternoon and missed estimates. Tokyo is down almost 1% right now. This might be the start of actually a needed correction. We touched 1200 in the SP500 today and then backed off. Or at least the SPY touched 120.04 (1204 in SP500 pts). I predicted that we would run to 1200 then probably back off some. I'd expect a down opening in the morning but we shall see how it plays out. Longer term I think we are headed higher though.

We're always headed higher long-term.

I hope we get a pullback soon. I don't want to invest the rest of my cash while the market is still going up.

banyon
04-13-2010, 08:20 AM
Alcoa reported earnings this afternoon and missed estimates. Tokyo is down almost 1% right now. This might be the start of actually a needed correction. We touched 1200 in the SP500 today and then backed off. Or at least the SPY touched 120.04 (1204 in SP500 pts). I predicted that we would run to 1200 then probably back off some. I'd expect a down opening in the morning but we shall see how it plays out. Longer term I think we are headed higher though.

Alcoa has disappointed for quite a while. I wouldn't hold them up as any kind of benchmark.

petegz28
04-14-2010, 09:10 AM
SP500 is up over 1200. I was ready to take some profits today but the earnings news rolling in is pretty damn good. Intel blew away estimates as did JP Morgan. Yum Brands (Taco Bell, Pizza Hut, KFC, LJS, A&W) reports this afternoon and should have good earnings as well.

Also Oil supplies had an unexpected draw which is another positive indicator for the economy.Analysts had expected a build in supplies. Business inventorires also had a positive report this morning.

Those of you who said this wasn't a real move, please, do me a favor, keep doubting it.

stock-man
09-15-2010, 01:36 AM
The recent global recession has thrashed the world economy Economists and financial experts are now focusing more and more on the bear market and are alarming the investors to pay attention to the lessons from the bear markets so that they could be prepared for the future downturns.

eazyb81
09-15-2010, 06:15 AM
Wait, I thought Stewie promised the Dow would hit 5,000 in early/mid 2010?

I expect the market will be range-bound at least through the November elections, but even after there's not a ton to be excited about on a macro level. However, like always, there are some great undervalued companies out there. Even without Hurd, I love HP right now. It's trading well below peers at approximately 8-9x '11 earnings.