The bulls are building a sandcastle on the cover of Barron's, whose Big Money poll may be of...

The bulls are building a sandcastle on the cover of Barron's, whose Big Money poll may be of dubious predictive value, but gives a great summation of the current conventional wisdom. Some areas of leaning to one side of the boat: Just 2% of those surveyed are bullish on Treasurys, and while 31% feel tech is the place to be over the next 6-12 months, not one thinks it could be the worst performer. A not-yet-IPOed Facebook makes the list of most overvalued stocks.

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Comments (11)
  • alpine
    , contributor
    Comments (2122) | Send Message
    I expect the Achille's heel of the market next week to be Apple's revenue and earnings, as they could well report a shortfall on both fronts, and blame chip supply shortage, which in turn is likely to take down all of the technology sector, NDX, and yes, the broader market, as Apple's stock market eco-system is omni-pervasive, due to its supplier base being the likes of Corning, Intel, China/Taiwan Inc and even European stock markets.


    Anytime you see Mr. Alan Abelson turn mildly bullish or even slightly scathing about his fellow perma-bears, you know it is time to exit the markets......besides, it seems, May is not so far away!
    21 Apr 2012, 09:43 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (10079) | Send Message
    Haven't we learned that chip shortages only apply to Apple's competitors. Apple always buys up the supply it needs leaving the weaklings left without anything.
    21 Apr 2012, 11:53 AM Reply Like
  • Fuma
    , contributor
    Comments (223) | Send Message
    Agree with you that APPLE revenue is the next week main event,
    S&P 500 2012 performance dependence on AAPL noted by
    FT Trading Post and
    Investors will be looking forward to AAPL's quarterly results due on Tuesday.
    APPL remains above 50-day moving average of $567.
    The danger for the stock is that traders may have developed an expectation for being very pleasantly surprised.
    Friday closure of $572.98 is very near to 50-day average.
    22 Apr 2012, 02:45 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Sandcastles can come tumbling down when the tide rushes in.
    21 Apr 2012, 10:31 AM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (10079) | Send Message
    thinking and doing aren't the same. If everybody was really so bearish on Treasuries wouldn't they sell them. That isn't happening.
    21 Apr 2012, 11:52 AM Reply Like
  • bearfund
    , contributor
    Comments (1550) | Send Message
    If you want a Treasury market sentiment indicator that matches the market's price action, you'll need to make sure you poll the Federal Reserve Bank of New York. While you're at it, go ahead and weight the survey by net position size. Come to think of it, why bother asking anyone else at all?
    21 Apr 2012, 03:38 PM Reply Like
  • Conventional Wisdumb
    , contributor
    Comments (1800) | Send Message


    I wonder if Alan Abelson understands the irony of his analogy.

    "Triggering Events
    A mass movement event can occur any time a slope becomes unstable. Sometimes, as in the case of creep or solifluction, the slope is unstable all of the time and the process is continuous. But other times, triggering events can occur that cause a sudden instability to occur. Here we discuss major triggering events, but it should be noted that it if a slope is very close to instability, only a minor event may be necessary to cause a failure and disaster. This may be something as simple as an ant removing the single grain of sand that holds the slope in place.


    Shocks - A sudden shock, such as an earthquake may trigger slope instability. Minor shocks like heavy trucks rambling down the road, trees blowing in the wind, or human made explosions can also trigger mass movement events.


    Nevados de Huascarán, Peru, 1962 and 1970.


    Nevados de Huascarán is a high peak in the Peruvian Andes Mountains. The peak consists of granite with nearly vertical joints (fractures) covered by glacial ice. On January 10, 1962 a huge slab of rock and glacial ice suddenly fell, with no apparent triggering mechanism. This initiated a debris flow that moved rapidly into the valley below and killed 4,000 people in the town of Ranrahirca, but stopped when it reached the hill called Cerro de Aira, and did not reach the larger population center of Yungay."



    "Well, in 1987 three physicists, named Per Bak, Chao Tang, and Kurt Weisenfeld, began to play the sandpile game in their lab at Brookhaven National Laboratory in New York. Now, actually piling up one grain of sand at a time is a slow process, so they wrote a computer program to do it. Not as much fun, but a whole lot faster. Not that they really cared about sandpiles. They were more interested in what are called nonequilibrium systems.


    They learned some interesting things. What is the typical size of an avalanche? After a huge number of tests with millions of grains of sand, they found out that there is no typical number. “Some involved a single grain; others, ten, a hundred or a thousand. Still others were pile-wide cataclysms involving millions that brought nearly the whole mountain down. At any time, literally anything, it seemed, might be just about to occur.


    It was indeed completely chaotic in its unpredictability. Now, let’s read these next paragraphs slowly. They are important, as they create a mental image that helps me understand the organization of the financial markets and the world economy.


    To find out why [such unpredictability] should show up in their sandpile game, Bak and colleagues next played a trick with their computer. Imagine peering down on the pile from above, and coloring it in according to its steepness. Where it is relatively flat and stable, color it green; where steep and, in avalanche terms, ‘ready to go,’ color it red.


    What do you see? They found that at the outset the pile looked mostly green, but that, as the pile grew, the green became infiltrated with ever more red. With more grains, the scattering of red danger spots grew until a dense skeleton of instability ran through the pile. Here then was a clue to its peculiar behavior: a grain falling on a red spot can, by domino-like action, cause sliding at other nearby red spots. If the red network was sparse, and all trouble spots were well isolated one from the other, then a single grain could have only limited repercussions.


    But when the red spots come to riddle the pile, the consequences of the next grain become fiendishly unpredictable. It might trigger only a few tumblings, or it might instead set off a cataclysmic chain reaction involving millions. The sandpile seemed to have configured itself into a hypersensitive and peculiarly unstable condition in which the next falling grain could trigger a response of any size whatsoever.”


    Something only a math nerd could love? Scientists refer to this as a critical state. The term critical state can mean the point at which water would go to ice or steam, or the moment that critical mass induces a nuclear reaction, etc. It is the point at which something triggers a change in the basic nature or character of the object or group. Thus, (and very casually for all you physicists) we refer to something being in a critical state (or use the term critical mass) when there is the opportunity for significant change.


    But to physicists, [the critical state] has always been seen as a kind of theoretical freak and sideshow, a devilishly unstable and unusual condition that arises only under the most exceptional circumstances [in highly controlled experiments]… In the sandpile game, however, a critical state seemed to arise naturally through the mindless sprinkling of grains.”
    21 Apr 2012, 11:58 AM Reply Like
  • untrusting investor
    , contributor
    Comments (9903) | Send Message
    Yes, very interesting articles and studies. Had seen them before somewhere along the line, but almost forgotten about them now. Thanks for posting them and reminding us all.
    22 Apr 2012, 07:59 PM Reply Like
  • Ryan1
    , contributor
    Comments (3) | Send Message
    I wonder what the 'plunge protection team' will think of this!
    21 Apr 2012, 03:03 PM Reply Like
  • Ryan1
    , contributor
    Comments (3) | Send Message
    I'm just a pipe-fitter!
    21 Apr 2012, 03:03 PM Reply Like
  • buyitcheap
    , contributor
    Comments (1902) | Send Message
    Not sure about that survey. We just had an auction with what is probably one of the best bid to cover ratios ever, a nice solid 3 handle. No, there is significant interest in the full faith and credit of the USA. Add in a couple of good corrections and treasuries climb to the 150s....
    22 Apr 2012, 06:34 PM Reply Like
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