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Thanks, for your comments jrintl. I don't think I've read Roach.
I'm not falling on a sword about a secular bull. I did point out that some folks (like Don Rowe and even Harry Dent) have argued that we just went through a nasty cyclical bear market and that we remain in a secular bull. They believe that new technology and rotation will drive our markets ever higher. I am sure that they are counting on the Asian markets to play a bigger part in the future. Rowe would argue that there is plenty of fuel for a bull as long as AG primes the M3 pump.
If pressed I would have to argue that we are in a cyclical bull and remain wary of the case for having diversified investments and an open mind.
I am always about 150% invested but find that often some of my positions are boxed or hedged in some manner. It puts a crimp on gains when I'm right about the market direction, but, like Zeev, helps me sleep well at night.
Re:<<I believe you underestimate the complacency of most investors who are still itching to be burned yet again.>>
kahlua thanks for your comments. I believe you overestimate the "complacency" of investors. An awful lot of the money that has left the sidelines has gone into bonds and bond funds. Much of that has yet to move to equities but may well. If the market continues to find support at critical levels more money will seep into the stock market. Only after the next significant correction will we know more about cyclical and secular bull markets.
I can tell you this. There are some pretty smart folks out there that believe we remain in a secular bull and have yet another up leg left. I wouldn't fall too heavily on a sword regarding valuations. As Zeev and others have noted, PE's will be predicated on the other investment options available. It has been a while since we had .45% money market rates and 1% CD's to compete.
In over thirty years of investing I never saw sentiment more devastated than in October of last year. Investors were capitulating everywhere. Pessimism was rampant. Never has more money been sitting on the sidelines in money markets paying next to nothing.
In my opinion you have placed to much emphasis on "wash out" sentiments and have missed the beginnings of a new bull market, cyclical if not secular. It was not painful for you because you do not short, and 30-50% in the market is better than nothing. Still, you continue to draw new lines in the sand that in turn are being crossed...
Your investment style is solid and has allowed you to thrive in a devastating market. I congratulate you for that. I don't see a chink in your armor. What you miss out on is in degrees of success not potential.
A number of folks have adapted your cautiousness (lest I say bearishness) to their investment style and have continued to short the market. That has been unfortunate for them as breadth indicators suggest that most stocks are in a solid uptrend.
I again maintain that the market is not acting like the bear rallies of the past three years. The activity is climbing a wall of worry on muted volume, it is rotating into sectors and is generally becoming overbought without suffering violent melt downs.
I predict that you will find that support lines will hold and that stocks will be generally rising for the next year or so.
Perhaps, westy, but it would have been a heckuva commute.<g>
You already ROLF'd you @ss off last Friday. How many do you have?
You said the market indexes closed bearishy Friday. MLNM is now busting through 12.50.
Is it possible that...you are wrong?
Can I keep my hoosier home? It's only appreciated about 25% in the last eleven years and I need some digs.
Doesn't seem to be following westpacific's scenario either. The bio's don't seem to be collapsing...
MLNM seems to be still running...
Re:<<Sorry a decimal misplaced, the point however is that Sars is not much deadlier than some of the cold epidemics we get, it is not transmitted as easily and long term should not have a major impact. It surely is less of a problem than the like of Malaria , AIDS and cholera. The death rate does depend on the care given, in the US they still have not reported a single death associated with SARS. Obesity (fast food restaurants) kills many more Americans than AIDS, malaria, SARS and smoking combined.>>
Your post has a calming effect Zeev, unfortunately, I don't think you're correct. It is indeed deadlier than the cold epidemics that we get. The US has been fortunate that those who have contracted it are generally younger and their ability to survive it is significantly greater. Still, even a 5% likelihood of death for 30 year olds is much greater than any cold virus I can recall in my lifetime.
Moreover to compare with Malaria, AIDS, obesity etc. is a canard. Transmission of the disease is certainly different. AIDS transmission even to caregivers is negligible. SARS has infected numerous caregivers and killed many. Malaria and other diseases have preventative prophylactics and antidotes which have yet to be identified for SARS.
AIDS hasn't likely cancelled a single airline flight let alone nearly shut down an airlines. Until more is known about SARS, it will remain a viable economic sedative.
It's early, oh brainless one. They have demonstrated no hint at stemming the tide at this point. Two weeks ago the death toll was what? A month ago? Try to extrapolate from that what it may be two months from now.
Re:<<But I am not sure that either the US or Europe wants a surging POG. Is that why the gold complex is responding so sluggishly to dollar weakness?>>
If the dollar is weak, gold rises in dollars without fluctuation in the Euro.
Re: <<So far in the US, not one affected SARS patient died. SARS is a non event.>>
Try telling that to China. Estimates are 1/2 to 1 percent lopped off the economy.
I don't see victory being declared until the contagion dies down in China without having materialized elsewhere.
So Zeev, have you given up on the 11 to 15 range for FSTW?
Yes well. Welcome aboard to the "I'm not so certain after all" train. We're a couple hundred points up the track but better late than never.
Sorry to see you about ready to dump FSTW. The chart doesn't look pretty but I kinda figure Brock will come up with something to spruce it up...
The breadth in this market on top of the ability to remain overbought for extended periods of time suggests we are indeed in a cyclical bull. I am not a bit disheartened by the low volume which portends a "climb a wall of worry" aspect and I am clearly encouraged by the rising number of new highs. The generals are in front of the troops commanding good order and discipline in the market place...Bad news is even getting good news receptions...
Perhaps we consolidate...Maybe not.
Zeev, how does an overbought market in both a cyclical and secular bear continue to roll up 2 to 1 breadth margins day after day? This day started out with very negative breadth, yet here we are...
Something ain't right here....
Re:<<If the sox was more in synch with the Naz, I might have launched a late day tactic, but the sox is lagging behind, so I am assuming it is a falsy...>>
Interesting choice of words Zeev...Haven't used that word since grade school...are you insinuating strategic padding to make things appear better off than they are...?<g>
A carbon copy Zeev? Last year's Feb April rally saw a deterioration of new highs from the September to December 2001 run. Breadth numbers weren't nearly as strong. The political and war landscape was considerably different.
Your proposed scenario will require a lot of things to occur not the least of which is that this market must deteriorate quickly. New lows must expand rapidly.
If this overbought condition results in a sharp correction without significant leadership to the downside (New Lows) and is contained by 1260-1330, it will resemble a Bull correction more than a bear market...JMHO....
The thing that bothers me most about your contention that this is a bear market rally is that in many respects it does not resemble a bear rally. Typically a bear rally is sharp and shows high volume at the outset. As the rally extends the volume diminishes. Bear rallies lack leadership as new high lists tend to be limited to defensive stocks and fail to expand significantly.
This rally began climbing a wall of worry and did so from pathetic volume. It has gained rather than lost steam and is demonstrating more new highs than it did so back in January yet hasn't reached that peak. Moreover, bear market rallies end as quickly as they begin by turning on a dime and succumbing to an inexorable grinding down...The SARS and economic news should be weighing on this market yet doesn't seem to...
It simply isn't acting like a typical bear market rally...
Columbia: Foamologists gaining ground
NASA blames disaster on foam
Wed Apr 23, 7:04 AM ET Add Top Stories - USA TODAY to My Yahoo!
Alan Levin and Traci Watson USA TODAY
HOUSTON -- NASA (news - web sites) investigators have concluded that a piece of foam that hit Columbia during its launch is what caused a hole to open in the front edge of the shuttle's left wing and allowed superheated air to burn it apart on re-entry.
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Reuters
Slideshow: Space Shuttle
The conclusion is a turnaround for NASA. In the early days after Columbia disintegrated on Feb. 1, NASA's top officials said they did not see how the foam insulation that fell off the external fuel tank could have significantly damaged the shuttle's heat-protective skin. Administrator Sean O'Keefe derided critics who had placed blame on the foam as ''foamologists.'' NASA also relied on an engineering analysis conducted before Columbia's re-entry that said the foam hit would not pose a danger.
Space agency engineers plan to brief the independent Columbia Accident Investigation Board, which is in charge of the probe, about their findings in a closed meeting Thursday.
The foam impact quickly became a key suspect in the investigation, but other possible causes were not ruled out. Now, NASA investigators believe they have enough evidence to push aside other theories, officials and sources familiar with the investigation said.
Officials said the board also suspects that the foam impact probably caused the disaster, but it does not agree entirely with NASA. The sources cautioned that NASA's conclusion is preliminary.
In its weekly briefing Tuesday, the accident board released new information that supports the theory that foam damaged the wing, but the board also made it clear that it is not ready to formally declare the cause of the accident:
* An examination of an external fuel tank identical to the one used for Columbia's launch on Jan. 16 found 74 deformities in the foam, said Navy Rear Adm. Stephen Turcotte, a member of the investigation board. In one case, examiners found an air pocket 2.4 inches long. The deformities were found in the same spot where foam broke loose on Columbia's launch.
* Clusters of debris found in Texas suggest that pieces of the left wing's front edge in the spot where investigators believe the foam hit were the first to come off, board member James Hallock said.
* Harold Gehman, chairman of the accident board, said ''we think we're about 80% in agreement'' with NASA's theory. ''Most of what we're going to learn is on the table,'' he said. Even so, he cautioned that the board has just begun the phase of the investigation in which it attempts to analyze what happened.
The evidence that the foam probably caused the accident in which the crew of seven died is largely circumstantial. A temperature sensor located near where the foam struck the wing recorded the first unusual temperature increase during re-entry. Other sensors went blank, which indicates that wires routed near the front edge of the wing had burned through.
http://story.news.yahoo.com/news?tmpl=story2&u=/usatoday/20030423/ts_usatoday/5094487&e=2
...And I think it is important to keep an eye on M3.
I suppose it is not such a painful process to be wrong about the direction when the cost is only missed opportunity, Zeev. But you have steadfastly clung to your market forecast as the lines of demarcation continue to be crossed. Is there a Rubicon that forces you to reassess your bearishness or does this positive breadth against low volume hamstring one to the sidelines...(I realize you are doing some trading) indefinitely.
I actually find the low volume to be consistent with the possibility of a new cyclical bull. Bear rallies and Bull consolidations are generally on sharp moves with large volume. Bear markets and bull markets tend to begin with a whimper rather than a BANG.
Not yet ready to call this one, however, per a previous post, am not surprised that this has rallied much further than you were expecting.
http://www.investorshub.com/boards/read_msg.asp?message_id=889156
Re:<<As I postulated in my previous posts, I'm contemplating a Memorial Day top, or roughly six weeks of rally from here on.>>
Now I'm confused. How does this track with the summer or early Fall relapse which might result in new lows. Are you suggesting that follows an explosion up?
Zeev, the early strength has hung in there pretty well. Is the market stronger than you expected or just stubborn<g>? Would you expect a close near the high and a G&C tomorrow or no gap????
Perhaps its just my inability to speak Hungarian, but when you said:
<<I took profits in RGLD yesterday and NEM today, am not very big on gold (g).>>
while you were expecting the market to struggle...I took a leap of faith that you no longer expected gold to operate as a counterbalance to equities...
No longer view the golds as a hedge for the market drop?
Re:<<We might even open at that 1365 or even higher, the war effect. >>
Thanks for even trying to call a market pushed around by war news. I suspect, however, that we break above that 1425 March high before we find out whether the market is going higher or lower in the intermediate term.
As I suggested earlier, the countermove of the "first stage" of the Nassacre(if that's what the decline from November to March was) wasn't going to be satisfied by a few days rally.
The big question remaining is whether we see another run up above 1500...
Re:<<Rejected...little to do>>
Try John 10 as an example...
http://www.blueletterbible.org/kjv/Jhn/Jhn010.html
King James Version (KJV)
John - Chapter 10
Jhn 10:1 Verily, verily, I say unto you, He that entereth not by the door into the sheepfold, but climbeth up some other way, the same is a thief and a robber.
Jhn 10:2 But he that entereth in by the door is the shepherd of the sheep.
Jhn 10:3 To him the porter openeth; and the sheep hear his voice: and he calleth his own sheep by name, and leadeth them out.
Jhn 10:4 And when he putteth forth his own sheep, he goeth before them, and the sheep follow him: for they know his voice.
Jhn 10:5 And a stranger will they not follow, but will flee from him: for they know not the voice of strangers.
Jhn 10:6 This parable spake Jesus unto them: but they understood not what things they were which he spake unto them.
Jhn 10:7 Then said Jesus unto them again, Verily, verily, I say unto you, I am the door of the sheep.
Jhn 10:8 All that ever came before me are thieves and robbers: but the sheep did not hear them.
Jhn 10:9 I am the door: by me if any man enter in, he shall be saved, and shall go in and out, and find pasture.
Jhn 10:10 The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have [it] more abundantly.
Jhn 10:11 I am the good shepherd: the good shepherd giveth his life for the sheep.
Jhn 10:12 But he that is an hireling, and not the shepherd, whose own the sheep are not, seeth the wolf coming, and leaveth the sheep, and fleeth: and the wolf catcheth them, and scattereth the sheep.
Jhn 10:13 The hireling fleeth, because he is an hireling, and careth not for the sheep.
Jhn 10:14 I am the good shepherd, and know my [sheep], and am known of mine.
Jhn 10:15 As the Father knoweth me, even so know I the Father: and I lay down my life for the sheep.
Jhn 10:16 And other sheep I have, which are not of this fold: them also I must bring, and they shall hear my voice; and there shall be one fold, [and] one shepherd.
Jhn 10:17 Therefore doth my Father love me, because I lay down my life, that I might take it again.
Jhn 10:18 No man taketh it from me, but I lay it down of myself. I have power to lay it down, and I have power to take it again. This commandment have I received of my Father.
Jhn 10:19 There was a division therefore again among the Jews for these sayings.
Jhn 10:20 And many of them said, He hath a devil, and is mad; why hear ye him?
Jhn 10:21 Others said, These are not the words of him that hath a devil. Can a devil open the eyes of the blind?
Jhn 10:22 And it was at Jerusalem the feast of the dedication, and it was winter.
Jhn 10:23 And Jesus walked in the temple in Solomon's porch.
Jhn 10:24 Then came the Jews round about him, and said unto him, How long dost thou make us to doubt? If thou be the Christ, tell us plainly.
Jhn 10:25 Jesus answered them, I told you, and ye believed not: the works that I do in my Father's name, they bear witness of me.
Jhn 10:26 But ye believe not, because ye are not of my sheep, as I said unto you.
Jhn 10:27 My sheep hear my voice, and I know them, and they follow me:
Jhn 10:28 And I give unto them eternal life; and they shall never perish, neither shall any [man] pluck them out of my hand.
Jhn 10:29 My Father, which gave [them] me, is greater than all; and no [man] is able to pluck [them] out of my Father's hand.
Jhn 10:30 I and [my] Father are one.
Jhn 10:31 Then the Jews took up stones again to stone him.
Jhn 10:32 Jesus answered them, Many good works have I shewed you from my Father; for which of those works do ye stone me?
Jhn 10:33 The Jews answered him, saying, For a good work we stone thee not; but for blasphemy; and because that thou, being a man, makest thyself God.
Jhn 10:34 Jesus answered them, Is it not written in your law, I said, Ye are gods?
Jhn 10:35 If he called them gods, unto whom the word of God came, and the scripture cannot be broken;
Jhn 10:36 Say ye of him, whom the Father hath sanctified, and sent into the world, Thou blasphemest; because I said, I am the Son of God?
Jhn 10:37 If I do not the works of my Father, believe me not.
Jhn 10:38 But if I do, though ye believe not me, believe the works: that ye may know, and believe, that the Father [is] in me, and I in him.
Jhn 10:39 Therefore they sought again to take him: but he escaped out of their hand,
Jhn 10:40 And went away again beyond Jordan into the place where John at first baptized; and there he abode.
Jhn 10:41 And many resorted unto him, and said, John did no miracle: but all things that John spake of this man were true.
Jhn 10:42 And many believed on him there.
Fortunately he will take each of them exactly where they are and not lump them together as many would have him to do. Unfortunately, he will have little to do with all who rejected him.
I subscribe to the school of thought that suggests there are two opposing forces in the physical world.
Though Christ most certainly was at odds with the Talmudim, anyone suggesting he was a cabalist is at best unfamiliar with prophecy from the Old Testament. There are many who believe the Talmudim had evolved into a corrupt and self serving element rather than one that served Yahweh.
Re:<<. I know it is counter "Christian Doctrine" (which claims humanity is born with sin), but I have seen the worse of human bestiality, and yet the better side always win, sooner or latter.>>
Why would it be counter to "Christian Doctrine"? Man may have a sinful nature but he is afforded the "master key" to break that bondage. One must wonder how it is that good triumphs over evil if not God aided. To credit "humanity" would be particularly frightening when one takes accounting of the current state of humanity...
Yep. That's what I mean....Pretty hard to play. I think going to sleep not terribly exposed isn't a bad idea...
tough one to play, however, considering that the war news after a weekend could be pretty favorable....or not. Something will be pent up.
It is just as likely. Thus far Zeev has been a bit off target. It may just be that the turnips assumptions are off. This may eventually require adjustment. Zeev is very intuitive. But we will all be wrong on the market sometimes.
My point, Zeev, is that if we complete the rise by Wednesday at the latest, I would be more prone to believe that last Wednesday was merely the b wave of a larger fourth (sometimes they slightly pierce the third wave low) and we are in the process of completing the c wave. This would mean that the first leg of the Nassacre isn't yet over. If it is over, as you now believe, then I doubt this rally will complete in just a week.
Re:<<This run should be over before mid day on Wednesday, all, of course, IMTO.>>
It is difficult to believe that a 14 week decline from the November highs was just resolved by a one week rise. That is asking an awful lot of faith.
That new market "leaders" aren't forthcoming may be problematic but can be resolved in time. That the market shows no punch while wary consumers fail to commit with so much international uncertainty is hardly surprising.
Your resolve is easily justified as you only stand to lose opportunity should the market surprise to the upside. Shorts should heed the last four letters of the above comment.
Those that suggest that bear markets don't end the way this one did are, at best, poor students of the market. Bear markets end when they do. Period.
Whether this one has or not will only be known in good time. The longer it takes for this market to reach new lows the more likely we have indeed seen the lows.
The only case for a new bull is the prospect for security and improved economic circumstances. That is a tough pull from the current milieu. It has been tough before.
That may be so mlsoft. Still short term movements don't necessarily correlate to economic noise.
Yes, we have worked off some upside bias the last three days. The last hour of trading today did exactly what one would have expected, however, which was to ride back up into area previously traversed and close with a slightly upward bias.
Like I said, next week could be a different story. Although very good news could start the day up I wouldn't expect traders to keep it up....
Perhaps, mlsoft but don't confuse market performance with economic reality. The past four years have certainly taught us that.
Don't forget that the market bottomed in 1932 in the last depression even though the economy really didn't hit bottom until '37.
Money is searching for the leaders of the new economy... Seen any lately? <g>
Actually, Zeev's scenario didn't make much sense. We are in a rising market mode...which has outpaced the scenarios he was working with...advances are outpacing decliners and there is negligible selling pressure. It only made sense that the market close with an upward bias...
Monday may generate some selling from the outset. Were pretty much news driven right now, however, so if Binie is captured we'd likely begin with a gap up.
Re:<<I mentioned yesterday that 1260 may take a little longer than a week. Got to roll with the punches.>>
But I thought you promised...
Zeev, I know you've been using NEM as a hedge or "short" proxy albeit the stock really hasn't acted like one. Do you think it will continue to be linked to stocks or is gold oversold enough that we about ready to "decouple"?