Michael Davey

Bullishness at Contrarian Extreme

Thanks Gavin.

Curious how they get to 92%. I don't want to shout BS, but it sure smells like it. Sentiment is bullish just now perhaps, but nowhere near the extremes being suggested, I suspect.


On Oct 18 12:18 PM Gavin G wrote:

> Michael
>
> Elliot Wave Intl take the Daily Sentiment Index from trade-futures.com
>
> So you have to check on the same.This is a paid subscription mind
> you.

Bullishness at Contrarian Extreme

Michael,

Can you elaborate on the makeup of EWI's sentiment index? There are no such extreme sentiment readings that I know of. Investor's Intelligence, for example is currently at 47.2% bulls.

I posed this question to Tim Knight yesterday and his answer was "it is right there on the chart," but I'm not sure he understood the question because nothing on EWI's chart explains what how these readings are comprised.

Tim Knight and now you are suggesting there were 2% bulls in March and subsequently inferring there are 92% bulls now (all according to EWI's sentiment index). There are no sentiment readings I know of at such extremes now and there were no sentiment readings from March which were as low as 2% bulls. I suspect the EWI index is extreme in and of itself (with no knowledge of how it is derived), but I challenge anyone to show us actual sentiment readings which show any such extremes.

Thanks.

Market to Fed: Get Ready to Tighten

It may be pre-mature to conclude how quickly the Fed ups the ff-rate, but historically the Fed follows the market and not the other way around.

This Fed may hold out, perhaps, as so much lately smacks 'unprecedented', but it won't really matter; the market dictates rates in the long run.


On Jun 05 01:41 PM Larry House wrote:

> This is premature. The Fed is on hold for months to come. If they
> do tighten soon, the market will dive. It is only a flood of dollars
> that has the market where it is. People are letting "green shoots"
> go to their heads.

7 ETFs to Short Right Now

Perfect except for the small fact that you can almost never borrow these shares

On Jun 04 02:22 PM Futurist wrote:

> I appreciate everyones information as to the "decay" factor in highly
> leveraged funds. I am aware of this fact but have not found a mathematical
> distinction between the decay of negative funds or positive funds.
> In fact I am quite amazed that shorting both type of funds at the
> same moment has been the perfect long term investment. Now whether
> that can continue during a bull market is yet to be seen.
> The decay factor will probably keep me from using these funds as
> a hedging tool. They are helpful for short term trading though.

Asset Managers Still Aggressively Chasing Risk

It's interesting in the last chart how when the number of deals exploded highest in Q2-08 that total proceeds only increased marginally the same quarter. I guess everyone and the kitchen sink came to the deal-table but the meat was already gone.

Worst-Case Scenario for Geithner Is Here

It cannot be shocking the Yes-test was designed to build confidence as much as anything else, but the fact that the market (bank stocks in particular) rallied going into results and then rallied (so far) coming out is the message to pay attention to.

It's still early (coming out of the test), but how the market responds to such events is more meaningful than what we think of the event, no? I wouldn't suggest positioning clients recklessly, but the market is all too often a better indicator than our personal viewpoints. If the market continues to rally and consolidate constructively, instead of reverting to bear-mkt behavior, then professionals who over-protect client assets are in danger of losing accounts. I manage trading accounts and I know it is hard for allocating longer-term portfolios in such a climate (no envy here), but I would think waiting for the market to break-down is more prudent for professional managers here - even if you you avoid the banking sector.

Clients who lose money in a down market are disappointed. Clients who don't make money in an up market fire their portfolio manager (one of the more interesting dynamics of the profession, since institutions have to buy an up-trend regardless of how stupid it may be appear).

The Rally, When It Comes, Will Be a Doozy

Lorddarley comment is relevant and insightful. Read it though and ask yourself if this isn't just a big Ponzi scheme.

No Missed Chance with Homebuilders

Yeah, talk about whipsaw and popcorn machines. Interestingly though, the industry group there has risen nearly into the top 25% of 197 ranked groups by IBD. I wouldn't invest in any of this, but I've keyed trading long now instead of short, beginning this month. On the side at the moment, but I know what those stuck short are thinking and feeling at the moment; I'm trading in on every slice lower until it stops working. Thanks for the article.

Mr. Market Missed Something In Bernanke's Speech

The Fed is a political animal and this is an election year - combine that with the raging financial forest fires out there and you can deduce their hand is forced.

New Fed-candy is meant for the ill-balanced, weak and dying financials and a shot in the consumer's (ARMS) during an election year, but the candy is just added-dandy for already healthy growth.

I'm keying growth from within the leadership groups; long and longer. Growth stocks are launching!

SunPower Corporation: Ridiculous Valuation, Heavy Insider Selling

The group showed terrific resilience today, following a healthy slice on the market pressure yesterday. JASO, YGE and CSIQ at moment are my favorite and I would avoid FSLR and SPWR. But to short based on high PE's, over valuation and insider selling of a growth stock is so Barron's!!

Livin’ In Larry Land: NetSuite Prices High, Oracle Soars

(set-up meaning for ORCL into eps-release - N was crapshoot either way, obv).

Livin’ In Larry Land: NetSuite Prices High, Oracle Soars

I wish I was paying more attention to the date for N. Obv. now that Larry picked this date to coincide w ORCL release - how did i miss that set-up?

Research in Motion Up Ahead of Earnings

...sorry, i botched the nakki link

Research in Motion Up Ahead of Earnings

Crap-shoot city baby! ...no position here, but I'll heat up a nakki and crack open a bottle of ginseng rattle snake cooler and watch the fun.

Barron's Blunder: Berkshire Is Fairly Valued, With or Without Buffett

Market Life According to Barron's: If a stock or market is (way) up high, it is overvalued and should be avoided. When a stock or market is down-down-down low, that one is a good value.

In this way we never have to own those silly GOOG's and AAPL's and we can sleep well at night knowing that our Enron's are much closer to zero so the relative potential drop is not so bad.