It’s time again for the weekend update of our "Real" Mega-Bears, an inflation-adjusted overlay of three secular bear markets. It aligns the current S&P 500 from the top of the Tech Bubble in March 2000, the Dow in of 1929, and the Nikkei 225 from its 1989 bubble high.
This chart is consistent with my preference for real (inflation-adjusted) analysis of long-term market behavior. The nominal all-time high in the index occurred in October 2007, but when we adjust for inflation, the "real" all-time high for the S&P 500 occurred in March 2000.
Here is a nominal version to help clarify the impact of inflation and deflation, which varied significantly across these three markets.
David Tice, chief portfolio strategist for bear markets at Federated Investors Inc, talks about the outlook for the U.S. economy. He sees a double dip coming and argues against stimulus to prevent it, saying policy makers shouldn’t act as “Good Time Charlie” preventing the deleveraging of U.S. households.
Bull markets, it is said, climb a wall of worry. Smart investors buy in early when worries about profits or inflation or wars scare away the faint of heart. Latecomers then bid up stocks as each worry becomes unfounded, until there is nothing left to worry about. Once there is only good news, the market peaks as there is no one left to buy.
Bear markets, on the other hand, fall into what I like to call the pit of doom. Forget about worries—actual bad stuff happens, until nothing bad is left to happen and the market bottoms as there is no one left to sell.
From early May through last week, the market dropped 1500 points into the pit, on the backs of gushing BP oil, riots in Europe, a 30% drop in pending home sales and the news that maybe your next door neighbor is a Russian spy. But now we’ve seen 680 Dow points added over seven straight up days before a slight decline yesterday. What the heck is going on?
Market Bears – what sub-species are you? "Outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks"--if that rings true, you’re a David RosenBear. Now you know. – Ilene
(read the below in an exaggerated Australian accent, like that guy who took bubble baths with great white sharks and electric eels but for some strange reason died in a freak animal incident.)
Krikey! This landscape is litrelly filled with Market Bears! But wait just a tick – there appear to be many different types of bears running about…all with different attributes and markings to help us tell them apart.
Let’s have a peak through the binoculars and see what we’ve got:
The Born-Again Bear (Ursus Scottradeum) - this creature was horribly wounded during two prior market crashes while remaining long and margined to the hilt. Has since sold entire portfolio at the bottom, subscribed to RGE Monitor and delights in telling the members of his old investment club what morons they are. Can be found roaring "bwahaha" at other investors on the Yahoo Finance message boards.
The Perma-Bear (Ursus Abelsonious) – the very definition of "creature of habit", Perma-Bears are right 2% of the time but tedious and pedantic 100% of the time. By never conceding the fact that anything could even possibly be a positive, they render themselves irrelevant, even during actual bear markets. Many, however, are brilliant and lovable, despite their unwillingness to change or concede.
The Conspiratorial Bear (Ursus Tinfoilicon) – A highly adaptive sub-species of the Perma-Bear. These animals are known for their over-perspicacity and have foreseen 11 of the last 3 market corrections due to a light social calendar and a fondness for Data-mining & Dragons. They are, however, always the most interesting bears to behold in the forest and serve the important role of keeping the other woodland creatures on their toes and alert.
The David RosenBear (Ursus Aurum Minotur) – a species that is outwardly concerned with the instability of economies and markets yet cannot resist the urge to speculate in gold stocks. He will justify his "playing" of precious metals with myriad warnings of inflation, deflation, mega-flation, Gaga-flation etc, but in reality, he is banking on the greater…
The $OEXA200R Monthly (the percentage of S&P 100 stocks above their 200 DMA) is a technical indicator available on StockCharts.com used to find the "sweet spot" time period in the market when you have the best chance of making money.
The weekly charts below are current through the week's close.
Weekly OEXA200R vs. S&P Comparison
According to this system, the market is now Tradable. The OEXA200R ended the week at 88%, up from 72% last weekend.
In the beginning it was banker suicides. Then about two weeks ago, suicides were replaced by outright murders after the execution-style killing of the CEO of a bank in otherwise sleepy (and tax evasive) Lichtenstein by a disgruntled client. Then on Friday news hit of another execution-type murder in just as sleepy, if not so tax evasive, Belgium, where in the city of Vise, a 37-year-old Director at BNP Paribas Fortis was murdered alongside his wife and a 9 year old nephew in a premeditated and orchestrated drive-by shooting.
Jack Delano Farwell, Texas, at the New Mexico state line. March 1943
LEAP2020 is a European political/economic research institute that doesn’t shy away from volunteering opinions on the topics it researches, something that works both for and against it. It publishes a new GEAB (Global Europe Anticipation Bulletin) report every month. I thought I’d share the ‘public announcement’ of the April 2014 issue with you, because it provides a clear idea of what some people think is going on with regards to the US/EU involvement in Ukraine and the war of verbal bellicosity they have initiated with Russia. Some voices, among them former US government official Paul Craig Roberts, are convinced there is a new neocon attempt aimed at provoking war...
New York-based Pfizer (NYSE: PFE) has reportedly approached UK's Astra Zeneca (NYSE: AZN) about a potential takeover deal, according to sources reported by the UK Sunday Times. The deal could be worth as much as £60 billion ($101 billion).
This one matters a lot. Abenomics was predicated on a lunatic notion—namely, that the economic ills from Japan’s massive debt overhang could be cured by a central bank bond buying spree that was designed to be nearly 3X larger relative to its GDP than that of the Fed. Yet anyone with a modicum of common sense and market...
Shares in Chipotle Mexican Grill Inc. (Ticker: CMG) opened higher on Thursday morning, rising more than 6.0% to $589.00, after the restaurant operator reported better than expected first-quarter sales ahead of the opening bell. But, the stock began to falter just before lunchtime on concerns the burrito-maker will increase menu prices for the first time in three years. The price of Chipotle’s shares have since fallen into negative territory and currently trade down 3.5% on the session at $532.89 as of 1:50 p.m. ET.
Last week’s market performance was nasty again, especially for the Small-cap Growth style/cap, down 4%. Large-caps faired the best, losing only 2.7%. That’s ugly and today’s market seemed likely to be uglier today with escalating tensions over the weekend in Ukraine.
But once again, positive economic trumped the beating of the war drums. Retail Sales jumped up 1.1% over a projected 0.8% and last month’s tepid 0.3%, which was revised up to 0.7%. While autos led, sales were up solidly overall. Business inventories were about as expected with a positive tone. Citigroup (C) handily beat estimates to add to the morning’s surprises. As a result, the market was positive through most of the day, led by the DJI, up 0.91%, and the S&P 500, up 0.82%. NASDAQ had a less...
[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...
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I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
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