The Tide Has Turned

All I am hearing is the market moved "too far to fast" and "mark-to-market is already priced in". I think these are just euphemisms for saying "I missed it". The tide has turned and now the bulls that indeed were willing to buy on a bottom are in control.

The NASDAQ Composite [CCMP] and 100 [NDX] are both higher on the year. So is the LakeView Restaurant and Food Chain Index [LVFRI]. Money is being made. We are back to a fundamentally driven market and those who over relied on negativity and charts are being left behind.

The days of short selling stocks like shooting fish in a barrel are behind us. The 100 year flood has receded and the paradigm of endless negativity is being swept away as the waters part.

Comments

[Roger Knights:]

It's the second wave of the hurricane that gets you.

Apr 03 06:13 AM

[killben:]

Basis .. instead of just statements, please

Apr 03 06:54 AM

[Sandeep Daga:]

Panic has receded but it doesn't mean good times are back. Stability needs to return. But the old problems are not over yet. If printing money is cure to all problems, no problem is big. Let's face it, business confidence is crushed so badly - even in Aisa - that just cheap may not help. It needs healing of time. Corp results are waiting. Expect a slogging summmer ahead.

Apr 03 08:02 AM

[abetterplace:]

You tell um, Scott.I behind you. Waaay behind you.

Apr 03 08:11 AM

[kmf:]

Nice that you think this is the case. The Fed and the Treasury have combined to do so much financial engineering that I don't think anyone knows the unintended consequences including Bernake and Geitner. It may all work and then again...
Can anyone who contributes to this blog list all the programs proposed and in force. I have lost track of committed funds and guarantees. And what about all the rule changes. Such a compilation would help many of us!

Apr 03 08:32 AM

[Allan Frain:]

All so simple. Create a budget deficit at 12.5% of GDP and the economy booms. We should have thought of this decades ago.

Apr 03 08:57 AM

[ain't no fo...:]

you had me on your side scott until you dissed the charts - they showed major positive technical divergences and solid, constructive multi-month flat bases going into the bottom last month - clearly indicating a buying opportunity.

also, there were beautiful double bottoms put in on virtually all of the multiyear index charts - with bottom #1 occurring in the Fall as a momentum bottom, then bottom #2 occurring in March as the price low

and these technicals that were flashing buy were doing so well in advance of your fundamentals which were, and still are, not even bottoming yet.

i'd suggest that if you added technicals to your bag of market studies, you wouldn't have been playing johnny-come-lately and waiting to crow one month and 1500 points after the technical bottom was in

Apr 03 09:09 AM

[Larry House:]

While I certainly hope you are right, Scott, there is absolutely no way to be so confident right now. Our financial system is still in shock, nothing has really been corrected (there is hope), consumers are still zombies, etc., etc. Way to soon for such a call.

Apr 03 09:54 AM

[mikel:]

Yikes, listen to ANY experienced money trader and you'll know this is a dead cat bounce and the economy is FAR from fixed. Equities people tend towards too much hype and not enough objectivity. :)

Apr 03 10:10 AM

[Great Swami:]

So, the S&P is around 830 now. Thats the P part, but where's the E part. Well we'll find out in the next few weeks and I suspect we won't like it one bit...go short

Apr 03 10:49 AM

[Pecos Jack:]

Thanks for the upbeat report. I love hearing the worst is behind us. To celebrate, I made a few carefully selected shorts.

Apr 03 10:51 AM

[sajincc:]

You must be speaking to the 401K pitch fork people standing outside your door. I've noticed that cheerleading continues even when its 50 to nothing. Thanks for the cheerleading.

Apr 03 12:44 PM

[The Geoffster:]

O.K. but just in case I'm long TBT

Apr 03 02:30 PM

[Fred Voetsch:]

Mr. Rothbort you sound like a good value investor but I suggest you stick to that based on your tendency to be bullish without reason.

I did a bit of research on you:

Is the Commodity Bull Market Over? May 4, 2008
seekingalpha.com/artic...

I think I was just going short of oil at that time...so how did YOUR trades work out?

CHK: Went from 55 to 19 today with a stop at 14 in between.

SWN: Went from 43 to 32 today with a low of 21 in between.

HP: Went from 56 to 26 today with a low of 18 in between.

DVN: Went from 114 to 48 today.

OUCH!!!


In your article of July 30, 2008 you recommended YUM and MCD, both are down since then.

In fairness you are a value investor but let me ask you a simple question: If you could simply accept all the data coming your way in 2007 and pulled out of the market, wouldn't you be better off?

Usually the response is that you don't want to miss the upturn but that makes no sense at all. Do you think the near 100% pop in 1932 was worth the 89% loss that came before it? Was the 50% pop (50% retracement of the original loss) worth the 50% loss in 1973-74?

Usually there is plenty of data to show a downturn is just over the horizon and there certainly was this time.

Apr 03 03:03 PM

[Phil Trupp:]

We are dying for good news, sir. A few solid numbers might make the dying a little easier.

Apr 03 03:09 PM

[Albertarocks:]

Well it bears repeating, and this time I'm saying it: "The market has moved way too far, way too fast... and mark to market finished being priced in yesterday April 2".

There I said it, and I mean it... because I shorted the market big time at the end of today, and I'm gonna do very well. This thing is way overcooked and we're going to see S&P at 500 before we'll see it at 1000.

Apr 03 07:08 PM

[Timmy the T...:]

Hmmm....
Love these stories, just push me to scoop up more shorts , but gonna
avoid the only stock that will REPORT good things. Banks who can
give all bad loans to us , then borrow a mountain of cash , then
call a $5 asset worth $25 all with the blessing of the us government and congress ....
With all that , the short term banks will soar ( under the deception of
real progress... )
Out here in the real world , our January retail sales were awful , february sales were better and march is in the gutter again !
REAL PEOPLE spending drives the real world !
And I can tell you from real estate agents to sale folks, things are not great out here ....

Apr 03 08:18 PM

[VP of Commo...:]

I can't believe this was posted as an "article". Why not just cut out the fluff and leave it at two words: I'm bullish.

Apr 03 09:37 PM