Replies to post #230274 on Zeev's Turnips Patch-No Politics (ZEEV)

[challo]

Zeev,

I don't read this board or you everyday (don't have that much time -g- ) but I just felt that I had to write and commend you on such fine market calls over the past few years.

I dug up some posts that I had saved. These seem to be the most pertinent and I would like to post them for posterity. -VBG. A big thumbs up to you. (AND, are your turnips STILL following the scenario from the 9-7-2002 post?


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From: Zeev Hed
Saturday, Nov 4, 2000 8:48 PM


Rashomon, I am not sure it is as high as 90%, but it seems to be serious
enough that these bankers refuse to provide more loans to the like of
Daweoo, and even some of the larger construction companies there. When
bank can no longer loan money (for whatever reason) you simply get
economic contraction. If too many banks get into serious troubles in one of
the SE Asia countries, you can expect a domino effect in other countries as
well, and thus a relatively severe recession in the basin, which will drag Japan
down with it. If at the same time, we in the US have a Bush administration
writing huge tax cut laws, Greenspan will not be able to come to the rescue
with "lose money", and then we get an extremely severe bear market. If Gore
gets elected and still keeps balancing the budget and minimal surpluses (big
surpluses are deflationary), the decline might not be too severe, and might
end by Spring with Greenspan once more stepping into the breach. So,
fasten your seat belt.

The problem, however, is that sooner or later, the US ability to pull the world
back from the brink will become limited by its ever increased trade deficits.
Each time we come to the rescue of the "world", we end up at a new higher
plateau of negative balance of payments. That will eventually bring about
inflation due to dollar weakening and other impacts, and a period of possible
stagflation. That is one of the reasons that I see a period of adjustment (a
relatively long period, possibly another 4 years at least), where the markets
are locked in a wide trading range between 1900 to 5300 on the Naz and
between 6000 or so and 13,000 on the dow.

Zeev


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Posted by: Zeev Hed
Date:9/7/2002 4:13:25 PM



The 950 is my current target for the bottom in the Naz multi years secular
bear (see my April 2000 discussion of the coming multi years malaise), I
think it may take place sometime maybe as early as late 2004, but more
likely, the bottom not be reached until late 2005, after a mini secular bull
market starting later this year (providing the Iraq situation is resolved)
lasting for about 12 to 18 months.

My rationale is quite simple, the July lows have "forecasted" the second
dip in the economy, we are going to go through a slow and painful
recovery starting possibly in the last quarter, maybe the first quarter of
next year. I don't think that recovery will be strong enough, and the fed
really have no ammunition left to pump it further. Similarly, on the fiscal
side, particularly if we need to finance a war, we will be limited with our
ability to stimulate the economy. After we exhaust a lot of pent up demand
(if any is left) with zero financing, and extremely low mortgage rates, yet
fail to create a real boom that add jobs and thus reinforce the economic
cycle, we should be ready to top again late next year or early 2004. Most
"pundits" see a three years cycle of economic expansion at least, but the
best I see is a year to 18 months of expansion. If I am right (and I'll revisit
these assumption later this year), then the next expansion will not be
enough to cause major growth in corporate earnings (we probably will not
exceed 2000 corporate earnings during 2003). Thus late next year, we will
still find ourselves with an overpriced market (particularly if most of 2003
will be a bull year), excess debt both in business and in consumer land
and that will require another "retrenchment" to rebuild balance sheets of
corporations and consumers, namely another recession. That will make
Bush 43 a one term president, just like his father, and may set the stage
then for a powerful secular bull market (that one possibly a three years
affair, but I can't "see" that far in the future). Because 2004 is an election
year, the market might be propped up artificially, creating a broad topping
formation, and the actual big bad bear bottom not happen until Autumn
2005, we'll see late next year how 2004 is shaping up.

The 950 number assumes that the Naz bleeding of listed stocks (a
horrendous 1500 to 2000 issues since March 2000, we had about 5300
listed stocks trading daily then and now we average about 3300 to 3500,
if someone has better numbers on total Naz issues then and now, please
step forward) will finally end here. Don't write off even lower bottoms for
the Naz.

Maybe I should reiterate the main issue with the market "It is the
valuation, stupid <g>" and it takes year for one set of psychological stock
valuations to be replaced with a new set, and typically, stock will return to
extreme undervaluation before they get back to the norm. By the time they
get back to the norm, we should once more be at the beginning of a
secular bull market in which Dow 16,000 of Da Cheif, is not a dream but
reality, but I dont see that number until we go through at least three
cyclical bear markets within the secular bear market, we are now finishing
the first one, the second one may not end until Autumn 2005, and the fimal
one, who knows.

Zeev


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Posted by: Zeev Hed Date:12/25/2003 11:53:40 AM

Here it is:

I have a strong beginning of the year, going to 2093 (Dow: 10730), maybe as high as 2163 (Dow: 10950) by the third week of January (early February if we take out 2093 in January). My most likely "schedule" is a ramp going into 1/5 above 2000, a slight retrench into 1/7 and then the run to 2093 before 1/23 (if that ramps does not generate the required extremes, we could follow beyond 2100 topping between 2/4 and 2/11). I expect by then that the sentiment indicators are going to register some nasty extremes, leading to a very sharp retrenchment in February to early March with a first bottom on 3/8 followed by another bottom (probably lower) around 3/24. The retrenchment could be between 150 to 250 Naz points (depending where we topped), but should be contained in the major containment zone of 1842/50 we are now quite familiar with. Probably, that bottom will not breach 1887 (we just tested earlier this month) and most likely will be above 1913.

From that March bottom, we should march in three major thrusts ups, culminating with a top in the late June early July period just under 2350 (nominal 2333, Dow: 11440), which I believe will be the year's top on the Naz. From there on, we could have a topping action (the dow eventually getting as high 12000 or so, but the naz staying below that 2350, though in one of the forks, the naz does get to 2390). After trading in a range (about 180 to 200 Naz points) till late August, we get a first down leg in what I believe will be a nasty 2005 bear market, resumption of the secular big bad bear (see #reply-13483082 from April 2000), of about 18%/20% drop (to about 1915 on the Naz) ending late September early October (nominal turn date 9/29), followed by a ramp into Early November.

As always, the turnips reserve the right to be wrong, change their mind and change it often.

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[PENNYPRINCE 1]

Zeev thanks for the golden road map. I wish I listened more carfully. Thanks again for all of your guidance. Good Luck

[jra2]

I have been in the office only in the mornings the last two days (mediation hearings), and I am sure I missed your replys to this question ,but if you would permit me to ask again ,I would appreciate your opinion .Your thought on BSTE going forward and is JCOM an earnings play ? Thanks in advance .

[onesevenus]

Yes, it would be very hard to maintain the anticipated market action with a significant further dollar gain. EUR/USD 1.15 -1.25 seems to be the range that can provide the required fuel for the most part of this year (first two-three quarters). With few possible peeks out of that range as neccessary. I based this on your turnips map.
I can't really see dollar staying close to 1.15 much less penetrating it. That line coincides with about $380/$390 in gold. Talking out of memory, so I may be off by some here.