ajtj99's Market Pulse

[ajtj99]

New Paradigm time - the commonly accepted premise the stock market discounts economic conditions 6-months out is outdated, IMO.

With new and faster economic data input from multiple sources, it's likely the market discounts economic conditions 2 months ahead, not 6-months.

The NBER said economic activity peaked in Dec. 2007. The stock market peaked 2-months prior to that.

I am one of the people who believe we will see a 2nd half recovery in the economy, but unlike many, I do not see a first quarter rally to discount that recovery. I believe we will test the November lows in March and drag along the lower range into May before moving up into the end of the year.

If we do test the lows in March and recover, it would be a signal the economy is going to recover somewhat starting in May. If we drag the bottom, it would suggest the majority of the economic recovery will happen July through the end of 2009. We'll see.