Seeking Alpha

It's been one month since the S&P 500 hit bear market territory and rallied hard. Since...

It's been one month since the S&P 500 hit bear market territory and rallied hard. Since then, market pundits have done an about-face, aggressively distancing themselves from any inkling of bearish sentiment. From a contrarian perspective, this behavior suggests another bear-market rally, says Mark Hulbert. Add to the mix the excessively bullish exposure of short-term market timers and it gets even more ominous. So, Hulbert says, "if it looks like a bear market rally, and smells like a bear market rally, then... ?"
Comments (23)
  • Brandon Gibbs
    , contributor
    Comments (225) | Send Message
     
    .. blame it on Obama, right?
    4 Nov 2011, 07:25 PM Reply Like
  • The Geoffster
    , contributor
    Comments (4013) | Send Message
     
    Blame it on all politicians unless they can prove otherwise.
    4 Nov 2011, 07:34 PM Reply Like
  • PotSmokr420
    , contributor
    Comments (285) | Send Message
     
    Like Ron Paul and that other guy who keeps putting bills to decrease pay and pensions for politicians. He another one of those old guys no one in Congress likes because he doesn't "play ball".
    4 Nov 2011, 08:05 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    The market is not discounting the weak numbers coming out of China, Germany, France, and the US.

     

    I see weak demand. We may escape this quarter because of the holidays but it is going to be rough without some significant resolution on the political fronts.
    4 Nov 2011, 07:39 PM Reply Like
  • untrusting investor
    , contributor
    Comments (9966) | Send Message
     
    exactly,worldwide austerity kicking in now.
    4 Nov 2011, 09:18 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    Hulbert mixes it up with a beer market rally! Those are characterized by too many people giving an opinion based on hot air.

     

    Anyhow, the CLEVER beer specialist pronounces on Monday that it is a bear market rally, proclaims a bull market rally on Tuesday, drinks a lot of beer next. He then observes the beer market development (beer synonymous with completely unpredictable because it is all about the feeling of Fiffie, Merkel's dog). Ones the beer market has decided clearly to the upside or downside the beer specialist goes back to the press and proclaims victory!

     

    The beer specialist wins twice: first, he is nearly always drunk or otherwise incapacitated and second, he is always right! Long live the beer specialist! Down with the bears and bulls!
    4 Nov 2011, 07:43 PM Reply Like
  • Canary Cash
    , contributor
    Comments (471) | Send Message
     
    up with the beers
    4 Nov 2011, 08:24 PM Reply Like
  • ssmith90
    , contributor
    Comments (45) | Send Message
     
    long BUD!!!
    4 Nov 2011, 11:00 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    Cheers.
    5 Nov 2011, 08:54 AM Reply Like
  • Canary Cash
    , contributor
    Comments (471) | Send Message
     
    It seems to me Hulbert tells us the grass is greener on the other side every other day
    4 Nov 2011, 08:26 PM Reply Like
  • PotSmokr420
    , contributor
    Comments (285) | Send Message
     
    Agreed, Bear on Tuesdays, Bull on Wednesday, correct every Friday.
    5 Nov 2011, 11:15 AM Reply Like
  • Joe Morgan
    , contributor
    Comments (1500) | Send Message
     
    Politicians can play all the games they want, they can pretend and extend for a lot of time......but what they are all missing is long term solutions for growth in which all boats(income classes) are lifted.

     

    Germany manufacturing orders, Eurozone PMI ,US weak jobs growth, etc.... points to a horrible 2012 for Global Growth. But be careful, stocks can rally and rally for a long of time......
    4 Nov 2011, 08:54 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    You are right Joe but I am not as concerned about the US as I am about other parts in the world. Europe is going in a mild recession. China might wake up ugly next spring. Maybe economies just can not grow forever and there are limits to expansion (resources etc.).
    4 Nov 2011, 08:58 PM Reply Like
  • wolverine27
    , contributor
    Comments (412) | Send Message
     
    those ism numbers out of europe are brutal . it has gotten no press.

     

    china needs europe and if there is no europe the dominos begin to fall.it smells like a suckers rally .they keep telling me valuations are cheap .....i have no idea what they are talking about.
    4 Nov 2011, 09:14 PM Reply Like
  • J 457
    , contributor
    Comments (951) | Send Message
     
    I've lost all faith in these type analyst. They don't know any better than you or I what will happen next. My thoughts; Europe already in recession as supported by ISM and other recent stats. Slowing growth in Canada, Australia, BRICS (watch China closely) and the US is arguably nearing or already in recession as well.

     

    US cutting deep in 2012 (debt committee debate coming soon) and those lost govt jobs have yet to be factored into the already high 9.1% unemployment rate. Private firms still cutting as well. This is the necessary deleveraging many have talked about for the last three years. Taking all this into consideration, how can the DOW be only 14% from its sub-prime housing debt HELOC free liquidity 2007 all-time highs? Simple, this thing we now call a "market" (70% of trades are made by HFT computers) have been fueled by everything from TARP to TALF to MBS bond purchases to POMO to FED QE and more taxpayer debt.

     

    While I can appreciate those "experienced" value investors chasing yield, the day of reckoning will cometh soon and right quickly, and when it does, the exit nor the liquidity will be near sufficient to support the sell-off. For those that watch the ticker closely, remember Oct 3 and Oct 4 when the selling accelerated and some stocks were dropping 15-20% a day. At that pace it wouldn't take more than a half dozen trading days for the DOW to drop below 10,000, and then some.

     

    Big news from CME tonight on margin requirements- although largely unreported, this could be the black swan event that triggers the next leg down to 1,020.

     

    For you chartist, we are in a downward trend- as in we have made lower highs and lower lows for last several months. Although the investment funds tried and tried, they never could break-thru or escape the 1,080 range, which, barring QE3 and more FED bond purchases, should translate to a new lower low in Nov or Dec, down below 1,070.

     

    EU is not fixed. EFSF needs a trillion. They cancelled this weeks bond auction and couldn't raise a mere 5 billion. The world is awash with debt and printing more money will not solve the problem.

     

    Look under the rug, in many ways this is worse than 2008 because interest rates are already at 0%, we're 15 trillion in debt, we need consumption to drive growth but we have a 1.4 trillion annual deficit (need less spending to balance deficit) and 600 billion annual trade deficit.

     

    Hold on tight boys and girls, we're entering the uncharted abyss. Let's not even think about Israel and Iran tension, or Pakistan accidentally loosing a nuke or two. I'm not completely bearish, afterall, out of 130mm working Americans we did add a whooping 80k jobs last month. What's that, a few tenths? And that should help the 46mm on food stamps. I also just learned (thanks Bernanke?) I'm now getting a cool .035% on my money market funds (up . 002%) so that should help my fixed income needs for at least a few days.

     

    We'll get through all this, but first we need to let the free markets work the way intended and correct. Until then, we're simply adding more debt and prolonging the inevitable. Until then, stay nice, help a neighbor, and pay it forward.
    4 Nov 2011, 10:27 PM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    I agree with Wolverine and J457.

     

    There is just way too much bad news going unreported and this is worse than 2008 because of interest rates at 0 and the additional debt.
    4 Nov 2011, 10:39 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2895) | Send Message
     
    Mark Hulbert says buy BAC, sell AAPL back in May.

     

    He was better with the CSCO call though.
    4 Nov 2011, 10:43 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    Hahaha, so one must do the opposite of what he says usually.
    5 Nov 2011, 08:54 AM Reply Like
  • PotSmokr420
    , contributor
    Comments (285) | Send Message
     
    Reminds me of Cramer. It is like the markets have failed both of them, but people keep listening apparently. Trump too.
    5 Nov 2011, 11:18 AM Reply Like
  • David Urban
    , contributor
    Comments (1036) | Send Message
     
    Got two words for people who want to buy CSCO, INTC, DELL, WFC, C, and BAC.

     

    Value Trap
    4 Nov 2011, 11:00 PM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    CSCO maybe not, rest yes. I wouldn't buy CSCO though.
    5 Nov 2011, 08:53 AM Reply Like
  • PotSmokr420
    , contributor
    Comments (285) | Send Message
     
    I'd buy, WM, ED, MCD, XOM, MSFT, VZ, ABV, and some others I can't think of right now.

     

    Most of them were good buys at the end of August. Now I'd have to think about it more. Everyone has been reporting good profits and lowering guidance. They will blast through 4th quarter estimates and preach clear skies.
    5 Nov 2011, 11:19 AM Reply Like
  • TruffelPig
    , contributor
    Comments (4091) | Send Message
     
    I also think so because of the guidance.
    5 Nov 2011, 05:52 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector