themackattack

Housing: Objects in the Mirror May Appear Closer than They Are

Maybe true, but soon is relative. There is so much pent up inventory that prices are likely to still decline for 6 months or more, even if its starting to turn.

So the impact on the equities markets may be soon, the best time to buy housing is probably still a ways off.

Global Stock Market Valuations: Patience Is a Virtue

Is it safe to say then that Cetin and Jorb and indeed the same characters?


On May 04 03:24 PM Jorb wrote:

> That's why I'm cherry picking the best stocks that benefit from global
> growth such as MA POT and Google, as opposed to buying an index.
>

Wall of Waiting Cash Could Drive Equities Higher

dollar cost averaging is a smart entry strategy, but the notion that it is a good strategy when applied mindlessly (e.g. consistently without regard to any additional factors) is a fallacy. It works best when the market is priced attractively or is in a down-trend.




On May 02 08:05 PM VennData wrote:

> Folks who say "money on the sidelines" do not understand money.<br/>
>
> Folks who do or don't "bet a recession is coming" and invest that
> way will have to make numerous correct guesses for the rest of their
> lives to beat the indexes. It defies logic they will outperform
> consistently.
>
> Sit tight, dollar cost average in, rebalance... anything else is
> speculation.

Wall of Waiting Cash Could Drive Equities Higher

The market appears "overbought" in the classic sense, and who wouldn't think it a bad time to buy after one of the largest two-month rallies in history. I have to admit that my expectation was to see some profit taking after such a monumental rally, and I was positioning myself to capitalize through some short positions.

But then I began to see things through a different prism of potential. First, let me start by saying that I believe it is a bit "contrarian" to be bullish at this point, precisely because the market has risen so much and so quickly. In some ways a continued bullish move would surprise us all because it would be historically inconsistent (and, therefore, contrarian).

We have to remember what the context is for this substantial rally -- and that is the second most severe decrease in the US stock market in history, at a pace that exceeds nearly every previous decline. Further, the decrease the market suffered from Jan 2009 to March 2009 was particularly severe, and neared catastrophic levels (failure of annuity companies, pension funds etc). The reality is the market was priced in late February as if the American economic system was on the verge of collapse.

Over the last two months it has become very clear that the American economy is not on the verge of immediate collapse (I'm not saying it won't collapse in the next few years). This realization has driven the market up rapidly, and justifiably so. Now, why would the market continue to go up after such an extreme rally? Well, quite simply the market has moved from a pricing level that reflected an expectation of economic collapse to a market level that presupposes a continued extremely severe recession. If economic statistics should begin to show recovery at all (and some are beginning to) we will quickly see the market priced at a new level, one that is more consistent with normal recessions or post-recession recovery.

People are so consumed by the magnitude of the current market appreciation, but when looked at in the context of the extreme magnitude of the recent decline, one can argue that we've only reached equilibrium as opposed to being "overbought". There is more to being truly "overbought" than just what the technical indicators might be saying.

Lastly, I believe that this bullish trend and recent rally has probably bridged the gap to the point in time where we begin to see the government's economic stimulus begin to have a significant impact. If you don't think nearly a trillion dollars of economic stimulus is going to at least create the appearance of recovery, you are mistaken. It's likely that the recent imaginary "green-shoots" will lead to stimulus created "green leaves".

I don't know what will happen in 2010 and beyond, but I will be positioning myself for at least a short - term market bounce to Dow 10k within 2009.

Oil Inventory Nears a 20-Year High: Does It Matter?

I have to believe that commodities, oil included, ultimately must be driven by supply and demand. So far, it has proven untrue in the case of oil. At this point, I'm assuming a market driven assumption that the summer will drive up oil and gas demand.

By June I will either be vindicated or will join the other side.

Real Estate: Rentals and Sales Prices Out of Sync

This chart is interesting, but imperfectly drawn to draw a more accurate conclusion. If one extended the two trendlines out with the same slope/trajectory they are currently on, it would suggest that housing will fall another 10% by 2011, +/- 5%.

Still a significant additional drop, but only half what is depicted here....

Mr. Roubini, Please Take a Seat

My question is how does this drivel get published here. Sorry, but I'll skip getting info from the "Good News eCONomist" in the midst of a recession/depression. It's this half ass type of analysis and damn near outright fraud that got us all into this predicament in the first place.

And, Oh, by the way, seeing Cetin the Cretin is your primary fanboi is really all one needs to know to understand the value in your writing.

Frankly, everyone on here who is pumping some sort of uber-bullish scenario is obviously pushing a personal agenda for their own gain. I know it, you know it, and everyone else knows it.

Yes, there has been some deceleration in the pace of economic decline, but the big question is whether that is temporary leading to a renewed decline, or at best the beginnings of a long-term economic malaise.

We all know, and by "we" I mean absolutely everyone, that the best case scenario for this economy is to flatten out into a long term coma drowned in large scale public debt. That's the best case - the odds are just as good that we see continued significant decline as the housing market bottoms over the next two years (followed then by a coma of 5 to 10 years).

The process of deleveraging is a slow one -- as of now everyone knows the economy is going to continue to contract; however ,its baked into the models and prices. Only when it becomes clear that deflationary declines will outpace current projections will the market begin its next leg down. That very well could mean a sideways market until late 2009, and then a significant continued decline.

N

Why Jim Rogers and Robert Shiller Aren't Buying U.S. Stocks Yet

Jasper,

I do believe you hit the nail on the head with your description of Goldilocks...

TMA


On Apr 26 07:50 PM Jasper M wrote:

> JohnFC: probably chewing gum, and unflushed public toilets. (seriously,
> do you need a reason to run from NY?)
> What do you suppose a Goldilocks Zombie would look like? I am guessing
> a trifle chubby, and unshaven . . .

Why We Shorted the QQQQ

What is the point of this Thumbs Down button if someone accruing 1000 Thumbs Down points doesn't get permanently silenced/muted?? (and you know whom I speak of)

Brett Arends thinks a covered-call options strategy might be just what the doctor ordered for today's turbulent markets: "Any buy-write or covered-call fund is going to underperform the stock market during a bull market. But after what you've been through, do you really care?"

Yes, but in this market why not take it a step further and add in a married put for the full Collar? With this volatility the collar is gold, and requires a lot less "market timing"...

How Long Can the Divergence Between Quantitative, Qualitative Trends Continue?

That's weird -- so many have been predicting a "Three-Little-Pigs" based economy, so this "Goldilocks" call is indeed befuddling.

Then again, I have seen many call for a general "Mother Goose" malaise over the next 3-5 years.

It is indeed difficult to know which will come to pass.

It's a Recovery, But Not as We Know It

Excellent article Sean -- its this type of insight and analysis that helps me keep my senses when the world around us is filled with short term illusions.

Personally, I think we could see a crazy run up as far as 9k or an outside chance at 10k before reality sets in. However, the underlying facts you've pointed out are critical to keep in mind, and while its great to take advantage of senseless rallies, market volatility and downside risk are as present and likely as ever.

Where Do We Go From Here?

MGA -- totally agree.....there is on doubt this would have been another bear market rally -- but what if it just bridges the gap until we start seeing some stimulus and bailout impact? I believe it could turn into a 12 month rally or more, until inflation rears its head.

Dicey times...I am long but hedged. If the market pierces 8200, i will loosen up and look for more upside. If we drop back below 7700, or 7500 in particular, I will probably get short for a while.

Suckers' rally: "It is unwise and foolish to treat this bear market like any other in the post-WWII period because it is totally unique; the scope and depth of the ongoing destruction of consumer and business credit, bank balance sheet compression and insolvency, consumer retrenchment and soaring unemployment should not be underestimated."

Yes, surely cetin must have a comment on this point.


On Apr 09 06:12 PM The Geoffster wrote:

> Where's Cetin?

Where Do We Go From Here?

Good stuff...I have been watching 8200 as the topped out retracement line with keen interest. Ever since the market had its first up day off the bottom i picked 8200 (using fib retracement) and decided to watch it as the determining factor as to whether the market was entering a true new uptrend.

Well, I recently found myself getting "optimistic" (right around Dow 7800), this in spite of the fact that I had always expected a retracement to this level. That is almost a certain sign that we are topping out and about to roll over. Must.......not...........