The Good News Economist

Bear Trap Has Been Set; Now It's Time for Short Sellers to Enter

On the contrary my friend,

Although I really like your short term charts, the bear trap snapped back in early to mid-December and many leading indicators are now pointing positive. You are looking at lagging indicators. And the market is looking forward.
Here are the top ten "leading indicators":
1. Average manufacturing-worker workweek
2. Initial jobless claims (4 wk SA)
3. Manufacturers' new orders for consumer goods and materials
4. Vendor performance (from the Purchasing Managers' Index report)
5. Manufacturers' new orders for nondefense capital goods
6. Building permits (from the housing starts report)
7. The level of the S&P 500
8. The inflation-adjusted measure of the M2 money supply
9. The interest-rate spread between the 10-year Treasury note and the fed funds rate
10. The expectations portion of the University of Michigan's Consumer Sentiment Index

Back in November already 4 of 10 were positive. What's happening today is high-lighted here: mast-economy.blogspot.... . With several more flipping to the upside.

Several prominent perma-bears are now fleeing to the open meadow:
John Cassidy, The New Yorker
Bill Fleckenstein has closed his short fund.
Doug Kass, says he sees upside in the averages.
Richard Rainwater is buying oil stocks again.
Marc Faber of Barrons now owns US equities for the first time in thirty years

It is time to find our matador costumes.