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bobdark

bobdark
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  • AAII Sentiment Survey: Optimism Falls To Lowest Level In A Year [View article]
    The sentiment is measured weekly. If you look at historical sentiment data from AAII, there is some inverse correlation to market when the readings become extreme or change significantly, but the outcome is generally delayed 2 -3 weeks, which means more downside through end of month is possible despite the low reading today. I don't expect a significant bounce until May and no new highs until June at which point the party is probably starting to end.
    Apr 17 03:48 PM | Likes Like |Link to Comment
  • 5 Explanations For Greece's Bond Yield [View article]
    Everybody's playing Russian Roulette in the markets and thinks they can get out fast enough when the need arises. Reminds me of the game we played as kid with a play time bomb you toss back and forth and try not to be the one holding it when it goes off.
    Apr 11 11:30 PM | Likes Like |Link to Comment
  • Auto Sales: Example Of How U.S. Growth Is A Mirage [View article]
    I agree. The writing is on the wall, the signs are everywhere and clear to anybody who is objective. The question is not if we are in the bubble but when it will burst. A major decline is coming that will rival the 2000 and 2007 corrections. Based on Shiller CAPE, margin debt, and other macro and global trends, it is likely to start in the next few months or may already be starting.
    Apr 11 11:08 PM | 4 Likes Like |Link to Comment
  • New Short Term Sell - Bulls, Time To Pull In The Horns [View instapost]
    Yes, to suppose that the outcome is not at least an inflation-adjusted lower low than 2009 after this peak is not supported by basic T/A and to suppose that we are in a new bull market is contrary to every other secular bull market start because of the Schiller P/E ratio starting point. There is a lot of blind hope out there saying this time is different. We are all tired of the secular bear market cycle and would love a new bull market is starting, but history shows that such a cycle can take over 20 years to play out and we are only in year 14. The behavior of long-term bonds over the last several years is a major confirming factor that equities markets are in for a lot more pain.
    Jan 26 04:07 PM | Likes Like |Link to Comment
  • Perspectives On Friday's Sell Off [View article]
    I see a nasty cycle starting reminiscent of 2000 where the dip-buying becomes the catalyst for further drops. Because the bubble mentality has firmly taken hold (one only needs to look at the latest sentiment polls) that stocks can only go up even after a nearly 3-x increase in the S&P 500, bounces will be predictable but will simply be met by more selling for smart money to get out. We are entering a grand rotation - not the one touted of bonds to stocks, but of dumb money coming in and smart money coming out. This is the catalyst that ultimately drives us back to 2009 territory over the next couple of years.
    Jan 26 03:34 PM | 1 Like Like |Link to Comment
  • Are Stocks Tumbling Too Far Too Fast? [View article]
    The problem with the VIX term structure 80% statistic cited is that it is only back to 2010, a period where the market has gone up in value by over 50%. Add in the period between 2000 and 2009 and lets see how much of a predictor this is over the long-term. I think this is what is going to burn a lot of technical traders who are basing their decisions on what has worked since the low in 2009 instead of looking at what worked during corrections. You have to integrate longer-term cycles to weight the short-term decisions to avoid "smart" trades ending in a disaster in a sideways or down market.
    Jan 26 03:24 PM | Likes Like |Link to Comment
  • S&P 500 - Sharply Lower But Broad Bullish Momentum Still Intact [View article]
    The technical analysis is useful but fundamentals will become a much stronger driver in 2014. It is becoming obvious that central bank distortions are generating no structural improvements and creating asset bubbles and market distortions all over the world. Most still have no clue as to the implications of the currency crisis in emerging markets on the US Market. MSM is ignoring and it is going to hit the market like a train wreck. Expect a lot of volatility.
    Jan 24 10:14 AM | 2 Likes Like |Link to Comment
  • Are S&P 500 Expectations Rational? [View article]
    Pompano,
    Shiller does not work in the real world and hasn't worked in 10 years? How do you arrive at that? First of all the Schiller model has worked up through 2009. In 1999 and in 2007, people also would have thought Shiller didn't work and then look at what happened the following years.

    Just because the market is over-valued by about 50% now based on Shiller and hasn't crashed yet doesn't mean it is wrong, it just means a reversion to mean is forthcoming. The market was wrong in 1999 and wrong in 2007. It is again wrong in 2014, it is just a matter of time. You way want to look at Doug Short's review of Shiller P/E using inflation-adjusted valuation before dismissing Shiller - http://bit.ly/JNT7Io.

    The market has reached a bubble phase now. It is mostly being propped up by its own inertia due to being the only desirable asset class because of policy. Much of the earnings have been due to buy-backs and mergers. Margin debt is at a record high at the same time interest rates are going up. There is very little support for the forward valuations looking at revenue growth rates, GDP, lack of workforce participation, global economic climate, and demographics. Expect a reversion to mean as has happened every time in the past when the valuations became excessive.
    Jan 4 05:53 PM | 1 Like Like |Link to Comment
  • 10-year yields hover near two-year highs [View news story]
    The Fed has lost control of this since rates become more subject to market pressures as they have to give up the monopoly of the bond purchases. The 10 year has effectively doubled in about 2 years. Rising interest rates would not be a problem if the economy was truly healthy, but with labor force participation, poor demographics, and much of the economy built on top of leverage through low interest rates, higher rates represent a significant headwind.
    Market forces favor higher rates since global interest in US Debt with massive Q/E in force in Japan and expected in Europe replace purchase of US debt with purchase of sovereign debt. China's property bubble and other policy issues are also steering them towards less reliance on US Debt.
    Dec 28 06:00 PM | Likes Like |Link to Comment
  • Is The Labor Force Participation Rate About To Fall Again? [View article]
    I don't put too much faith in the GDP of 4.1% being a harbinger of continued levitation in the stock market. GDP for Q3, 2007 was estimated at 4.9% in December, 2007. Its hard to see how poor demographics, declining work force participation, increasing tax burden, higher interest rates, global economic headwinds, and increasing wealth disparity can sustain an economy that is 70% based on consumer spending.
    Dec 28 05:41 PM | 3 Likes Like |Link to Comment
  • Facing The Headwinds Of 2014 [View article]
    Regarding GDP, let's not forget that GDP Q3, 2007 estimate was 4.9% in December, 2007. Investor sentiment, margin debt, P/E ratios, interest rate trends and S&P index performance are aligning very similarly to the late 2007 time period. From a long-term cyclical point, it looks much more like a long-term market top now rather than a new bull market.
    Dec 28 05:36 PM | 1 Like Like |Link to Comment
  • AAII Sentiment Survey: Optimism Near A 3-Year High [View article]
    Yes, last time sentiment was this high, there was a correction of about 20% that occurred within the following 7 months. Would be interesting to see a graph of how the AAII investment sentiment correlates to S&P.
    Dec 28 05:09 PM | Likes Like |Link to Comment
  • Japan's Markets - Moving Toward a Decision Point [View article]
    I would agree that Nikeii collapse would be an unlikely event were it not for the fact that Japan is not the only one devaluing their currency or printing money. We are in a competitive game here and all bets are off - deflationary collapse is actually possible even with huge amounts of money in the system.

    The problem is that the money is not actually being used in the economy but tied to asset valuations. If the bond markets panic because of sovereign default risk, this leads to panic of hyper-inflation. Cash hoarding is the natural outcome and only safe haven assets are purchased so you can still have a colossal market crash. Nothing is impossible including deflation with central bankers running amok.
    Oct 31 05:20 PM | Likes Like |Link to Comment
  • Worst Jobs Report Since April 2009? [View article]
    I really appreciate articles like this that go beyond the headlines. It seems that Obama-care may be having an undesirable effect of limiting jobs to 29 hours so that employers can avoid the costly coverage of full-time employees. The implementation of sequester cuts is also having a reduction effect on employment due to forced furloughs. This is another statistic that does not show up in the headlines, but will ultimately manifest itself in reduced per-capita income and consumer spending.

    I think what we are seeing today in the markets is more of a short squeeze than the start of any significant uptrend. There is nothing supporting the market at this point other than unrealistic valuations propped up by artificial money. About the only pure fundamental that bulls can point to is the inflated stock market - we have declining per-capita income, increasing credit obligations via student loan/auto debt, slowing global economy evidenced by multi-year lows in copper, and misleading statistics generated from policy implementation. The economy cannot be sustained or generated merely by inflating equity asset prices, this simply creates a bubble without underlying economic growth. The much-higher than average misses on revenue despite hits on increasingly-low earnings expectations is another non-headline indicator being missed.

    The money that needs to be in the economy to actually manage deleveraging of credit and spending is mostly in inflated asset prices. We are headed towards a 2000-style NASDAQ bubble in equities.
    May 3 01:51 PM | 1 Like Like |Link to Comment
  • This Bull Market Seems To Have Legs: 'Sell In May And Go Away?' [View article]
    There was an unprecedented high level of stock buy-back activity in first half of 2007. That didn't work out too well, so I'm not sure stock buybacks are a long-term positive for the market. http://buswk.co/18m7fnf
    Apr 30 07:48 PM | Likes Like |Link to Comment
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