Comments on Vinay Ayala's articles RSS Syndication from SeekingAlpha.com http://seekingalpha.com/author/vinay-ayala/articles http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-461354 461354 Mon, 13 Apr 2009 09:10:59 -0400
Lazlo Birini recently reviewed the predominant significant market bottom indicators including the ever popular VIX, today’s indicator of the month. Yes as you may have guessed, NONE of the perceived indicators consistently provided assistance. The operative word between the above paragraphs becomes consistently.

Ben Graham stated, “Inevitably when I find the key to any market, they change the lock!” A second sentence regarding the preceding sentence exists that is almost never published. “Buy value and weather the storm.”
]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-460213 460213 Sun, 12 Apr 2009 02:34:16 -0400
Even so, if you're nimble, you can still make some cash. For example, on the rally this past Th (April 9, 2009), I was able to cash out of my IWM May 43 calls for a very decent % gain. Of course, that meant that I held on Wed, where my swing trade lived up to its "swinging" phrase.

Good luck to all, use the volatility to your advantage, using Technical Analysis, but don't "rent" them for too long.
]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-460122 460122 Friar Tuck, > > The character you state is of little use, until integrity is returned. > > > You have a congress that stopped banking oversight of Fannie and > Freddie, now using taxpayer dollars to cover their tracks. You have > private banks that tried to keep the cash flowing by also making > bad loans and then trying to pawn them off as a basket of triple > A. > > And all are claiming it will somehow be Armagedon if they don't? > As if no one would step in and take deposits of money! Or buy homes > at any price! Or issues mortgages to good credit, or with a down > payment! > > There is a bank on practically every corner in this country! I am > not worried about banking survival, but I wonder how everyone else > could be? > > The requirement of restoring integrity to a guilty congress that > has only gotten stronger. That scares the hell out of me! > ]]> Sat, 11 Apr 2009 21:38:59 -0400
I respect your comments and I appreciate your candor. As writings neither convey any voice tone nor intent of sincerity, I hope you would view my following comments with reciprocity.

Wow, integrity, my gosh! When will it return to our Congress?

My answer: When you have the two parties virtually locked in to their self-serving positions and presenting candidates that are image manipulators who, in my opinion, are more interested in perpetuating their terms and jockeying for power, the timing for integrity to return to our Congress is -- Till Kingdom Come.

Teutonic

On Apr 11 12:54 PM Hmm?! wrote:

> Friar Tuck,
>
> The character you state is of little use, until integrity is returned.
>
>
> You have a congress that stopped banking oversight of Fannie and
> Freddie, now using taxpayer dollars to cover their tracks. You have
> private banks that tried to keep the cash flowing by also making
> bad loans and then trying to pawn them off as a basket of triple
> A.
>
> And all are claiming it will somehow be Armagedon if they don't?
> As if no one would step in and take deposits of money! Or buy homes
> at any price! Or issues mortgages to good credit, or with a down
> payment!
>
> There is a bank on practically every corner in this country! I am
> not worried about banking survival, but I wonder how everyone else
> could be?
>
> The requirement of restoring integrity to a guilty congress that
> has only gotten stronger. That scares the hell out of me!
> ]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459977 459977 Sat, 11 Apr 2009 15:38:11 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459959 459959 Sat, 11 Apr 2009 15:21:55 -0400
But if you have an etrade account like Cetin then you need to get back in there yesterday. By the time all the indicators are pointing up the market prices will have moved up 4 times or more. Most of the sweet trades are up over 60% already. and whatever Roubini and his fellow pretend to know-it-all say they are not going down.]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459894 459894 people who are laid off will find something to do. there's a lot > of unused skills and talents out there and this little recession > will provide a new road to wealth. there are now people who are buying > stocks to come to the aid of their country. there is no military > draft but there are other ways to support the troops and the country. > one way is to buy stocks in american and foreign companies. president > Obama has not said it yet but the old quote from president Kennedy > should be heeded at this time in our history. we are americans and > we have the american spirit that emerged through some very hard times > in our lives and we will do it again. some of the authors here obviously > do not know the history of this nation as a people bound and determined > to not only survive but to thrive. believing in that spirit of determination > and will, i would be bullish on america itself, and that tips the > scale. bulls 50 bears 0.]]> Sat, 11 Apr 2009 12:54:35 -0400
The character you state is of little use, until integrity is returned.

You have a congress that stopped banking oversight of Fannie and Freddie, now using taxpayer dollars to cover their tracks. You have private banks that tried to keep the cash flowing by also making bad loans and then trying to pawn them off as a basket of triple A.

And all are claiming it will somehow be Armagedon if they don't? As if no one would step in and take deposits of money! Or buy homes at any price! Or issues mortgages to good credit, or with a down payment!

There is a bank on practically every corner in this country! I am not worried about banking survival, but I wonder how everyone else could be?

The requirement of restoring integrity to a guilty congress that has only gotten stronger. That scares the hell out of me!



On Apr 11 07:56 AM friar tuck wrote:

> people who are laid off will find something to do. there's a lot
> of unused skills and talents out there and this little recession
> will provide a new road to wealth. there are now people who are buying
> stocks to come to the aid of their country. there is no military
> draft but there are other ways to support the troops and the country.
> one way is to buy stocks in american and foreign companies. president
> Obama has not said it yet but the old quote from president Kennedy
> should be heeded at this time in our history. we are americans and
> we have the american spirit that emerged through some very hard times
> in our lives and we will do it again. some of the authors here obviously
> do not know the history of this nation as a people bound and determined
> to not only survive but to thrive. believing in that spirit of determination
> and will, i would be bullish on america itself, and that tips the
> scale. bulls 50 bears 0.]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459880 459880 Sat, 11 Apr 2009 12:33:54 -0400
Lots of smart people know this is the time to buy stocks; like Ken Fisher, Warren Buffet and Doug Cass. Most of the commentators on this site were too late in selling their positions in 2007-2008 and will again be too late in buying into the recovery. This cycle repeats again and again - prices are never too high and never too low for them.

According to Doug Cass we hit a generational low in March. When will you find companies like 3M, P&G and J&J selling at half their intrinsic values? These companies operate everywhere and even if you do not believe in America and Europe, you cannot wish away Brazil, China, India.

]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459837 459837 Sat, 11 Apr 2009 11:35:41 -0400
Private companies do not look out for my interests (nor do I think they necessarily should), and I do not look out for theirs. If my interests coincide with theirs, great. If not, I look elsewhere.]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459745 459745 Sat, 11 Apr 2009 07:56:20 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459479 459479 Fri, 10 Apr 2009 21:41:37 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459471 459471 Fri, 10 Apr 2009 21:30:10 -0400
I like the author's use of the Conference Board's Index of Leading Economic Indicators..."leading" meaning looking ahead. Historically, it has a pretty good (but not infallible) track record. I also like his simple Bulls-Bears point system. It's easy to understand, and as Warren Buffett says, it's better to be approximately correct instead of precisely wrong.

I use the Leading Index in my own Timing Outlook (explained here: www.sensiblestocks.com... ). It's one of ten indicators that I employ in a rather simple short-term market outlook. With respect to Stone Fox Capital's comment about the importance of multiple months, I agree, and I require the Leading Index to be going in the same direction for three months in a row before I consider it to be positive or negative...otherwise I consider it neutral.]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-459282 459282 Fri, 10 Apr 2009 16:26:09 -0400
Agree with your outlook though. The key is always multiple months of positive numbers. For the most part though, so many of those numbers such as building permits and consumer sentiment are at such lows they pretty much have to reverse. Again the brillance of these indicators. On an absolute basis they look horrible, but being better then last month shows the turn. And once the trend turns, and investor doesn't want to be stuck looking at absolute numbers. ]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-458730 458730 Fri, 10 Apr 2009 09:37:22 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-458525 458525 Fri, 10 Apr 2009 03:33:56 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-458228 458228 Thu, 09 Apr 2009 20:00:08 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-458159 458159 Thu, 09 Apr 2009 18:44:47 -0400 We can't go back to being a consumer driven economy? Huh? What is an advanced economy driven by? Once you build the ballpark you don't need the builders anymore you need people to buy tickets to the game.
We went from 63-65% consumer driven economy to 70%. Okay, so we need to come down 3 or 4 or 5%, that can be replaced by a new industry. Or have inventions become a thing of the past?
Housing went up from 65% to about 70%. Again we are talking 5% as if the world is coming to an end.
Add the 5% of housing and 5% of consumer spending and you have the magical 10% depression number.
Except much of the consumer spending 5% will go to saving and paying down debt(a long term net positive)
Much of the 5% housing number will go to saving and much of it will be used to rent.

]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-457996 457996 Thu, 09 Apr 2009 16:49:27 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-457994 457994 Thu, 09 Apr 2009 16:48:31 -0400 http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-457951 457951 Thu, 09 Apr 2009 16:10:12 -0400
Dave]]> http://seekingalpha.com/article/130323-what-the-leading-indicators-tell-us-about-this-rally?source=feed#comment-457945 457945 Thu, 09 Apr 2009 16:05:55 -0400
I think the real recovery will have to rely on something other than consumer spending. (If I thought I knew what, I'd take up punditry.) There's no particular reason I can think of that we should go back to a consumer-driven illusion of prosperity. Long-term, readjusting the economy to more productive pursuits is a good thing. Short-term, it's very uncomfortable.

The stimulus and monetary policies can cushion the shocks, but I don't see how they can restore what came before. ]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-448604 448604 Wed, 01 Apr 2009 20:08:04 -0400 http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447886 447886 Wed, 01 Apr 2009 10:41:36 -0400
I mentioned housing and unemployment mainly because these are some of the indicators that I am looking at in looking for a turn in the economy.

But let's take a glance at some of the components of the Leading indicator index. The ones I will touch on are: credit spreads, consumer sentiment, initial claims and average weekly hours by manufacturing workers. Source: www.investopedia.com/t...

There is no arguing the fact that the credit markets have yet to come back to sustainable levels. As I mentioned in the article spreads are still not at encouraging levels. Consumer sentiment is still at extremely depressed levels and is signaling a deep recession. Initial claims are still increasing, as last week they registered an increase of 8,000 to 652,000. Looking at the payroll data today, it doesnt look like this situation is getting better very soon. Average weekly hours worked by manufacturers is still decreasing (www.bls.gov/news.relea...). This paints a terrible outlook for spending and hence earnings for companies going forward.

For those conerned about my age, I am turning 20 soon, so I guess that is a positive. Right?

]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447770 447770 The market keeps surging because huge funds are buying in anticipation > of many years of of steady growth. Consumers will resume spending. > Savings rates will dip back into negative where they will remain. > Oil and gas will eventually return to June 2008 levels.]]> Wed, 01 Apr 2009 09:30:02 -0400

On Mar 31 04:29 PM Cetin Hakimoglu wrote:

> The market keeps surging because huge funds are buying in anticipation
> of many years of of steady growth. Consumers will resume spending.
> Savings rates will dip back into negative where they will remain.
> Oil and gas will eventually return to June 2008 levels.]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447586 447586 Wed, 01 Apr 2009 06:13:04 -0400 http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447514 447514 Wed, 01 Apr 2009 02:42:35 -0400 http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447507 447507 Wed, 01 Apr 2009 02:05:24 -0400 http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447473 447473 Wed, 01 Apr 2009 00:54:14 -0400
Look at the economy; Not necessarily down the drain vis-a-vis corporate bankcrupcy rate. The sky is not falling (yet) but our eyes see devils and storms biting our necks with impunity.

Look at the stock markets (US and Europe), They are going the down the drain or rather already down the drain however you look at it. Bathtub, the bathwater, and the baby have already been thrown out the window so to speak. Only China and the other developing countries are refusing to go down the drain since Oct 2008 and instead China made a huge 75% rally since Oct.

Look at the monthly charts for technical analysis.

The Dow Jones was able to produce a BULLISH hammer bar this month of March 2009. Likewise, SnP has a bullish hammer bar, not unexpected. But Nasdaq or Compq was able to produce a bullish Engulfing hammer bar. What a stretch!

Now, it is not unusual for the hammer bar to be retrace. It is also not unusual that more new lows to happen after the first appearance of a bullish hammer bar. But in more cases than not, the new lows are mild and tolerable rather than drastic and dibilitating.

What is important is that the very existence of a bullish hammer bar in the monthly chart and after more than 18 months of sustained sell-off with no indication whatsoever of potential bottom - is now upon us.

A bullish hammer bar "after a sustained sell-off" is the high probability in many many cases of stock charts in all time frames of an IMPENDING bottom if not THE bottom.

Bet with high probability - not the public perception of current events.]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447438 447438 stock prices aren't based on today's situation, but on expectations, > so an analysis of the current economic status isn't necessarily a > good indicator of which way stock prices are going. There's a lot > of cash out there waiting to come back in.]]> Tue, 31 Mar 2009 23:43:31 -0400
There appears to be more cash because as a percentage of portfolios cash has increased. This isn't necessarily because investors are hoarding cash waiting for the opportune moment. Their other assets have PLUMMETED in value therefore increasing the percentage of cash held.

Further, how many investors do you really believe are dying to put all their precious cash back into the market? These are the very same people who just lost 50% or more of their net worth via housing and asset losses. Many of these same people are worried about their jobs, are scalp deep in debt, and face further losses in net worth due to the asset deflation the Fed and Treasury are desperately trying to combat.

Just because you read something in Barron's doesn't make it the an incontrovertible truth. Those saps are permabulls who only benefit professionally when you are fully invested. Listening to their (or CNBC's advice) thusfar sets you back to the early 90's.

Talk about a weak bullish argument.


On Mar 31 04:17 PM dharmabob wrote:

> stock prices aren't based on today's situation, but on expectations,
> so an analysis of the current economic status isn't necessarily a
> good indicator of which way stock prices are going. There's a lot
> of cash out there waiting to come back in.]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447337 447337 Tue, 31 Mar 2009 22:00:03 -0400
Employment is a lagging indicator and will worsen long after the stock market rebounds. Housing will lag as well. The last time home prices fell during the 1990 recession they remained stagnant until 1994 even though the stock market rebounded years before that.

As for credit you are dead on. I'd only add that the key ingredient you're missing is the earnings piece. Corporate cash flows are still deteriorating and the market will remain in a bear market until that is rectified. ]]> http://seekingalpha.com/article/128768-why-this-is-just-another-bear-market-rally?source=feed#comment-447287 447287 The market keeps surging because huge funds are buying in anticipation Funds without money > of many years of of steady growth. Consumers will resume spending. consumer without money > Savings rates will dip back into negative where they will remain. lol > Oil and gas will eventually return to June 2008 levels sure, a recover with high oil prices. lol ]]> Tue, 31 Mar 2009 20:59:50 -0400
> The market keeps surging because huge funds are buying in anticipation
Funds without money

> of many years of of steady growth. Consumers will resume spending.
consumer without money

> Savings rates will dip back into negative where they will remain.
lol

> Oil and gas will eventually return to June 2008 levels
sure, a recover with high oil prices. lol

]]>