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« Nosebleed PE Ratios and the Greenspan Bubble Era | Main | The Logic For Bonds: Fundamentals »

Wednesday, February 24, 2010

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Mamma Boom Boom

Finally! Maybe, now, we won't hear any more of those silly words, like BULLISH. I was begging to doubt the company I was keeping.

Whitebear

The falling housing prices is just a US problem. Look at Canada. Vancouver's housing back to all-time high in Jan already.

http://www.chpc.biz/Major_Cities_Chart.htm

Chabazite

Helicopter Ben? I prefer the term 'Bubble Bernanke' which just about sums up his policies.

Dave B.

Just an FYI . . .

If you had been influenced by David Rosenberg at Gluskin-Sheff for the last 12 months . . . you would have been short and kept shorting and lost all of your capital as the S&P rallied several hundred points.

You would have been looking for his "fair-value" price target of 825 on the S&P and lost all of your trading capital.

Rosenberg is great with all sorts of statistics when it comes to looking at the Economy... however, in the real world none of that really applies to the equity market given that it is LIQUIDITY driven.

Rosenberg makes for interesting reading, but I would suggest that his bearish economic outlook is incredibly hazardous to one's trading capital and has very little value or application for a Trader.

DG

"If you had been influenced by David Rosenberg at Gluskin-Sheff for the last 12 months . . . you would have been short and kept shorting and lost all of your capital as the S&P rallied several hundred points."

Boy, a pretty dire scenario, there. Of course, it's a load of crap, as usual. Rosenberg has NEVER said to short anything. In fact, he said to buy high-grade corporate bonds and avoid the equity market. "Avoid", not "short". Anyone who decided to do any shorting would have been doing so on their own.

Can you post one thing that isn't an exaggeration or wrong?

The funny thing is that you honestly seem to believe that no one could possibly trade a different way from you and make money.

Chabazite

Just a couple of thoughts on this issue. Are we saying that liquidity overrides all? If so then what about technicals? I have seen some really beautiful analyses on this site and elsewhere supporting either the bull or bear case, but if liquidity is king then technicals have little or no value; the picture can all be upset with a simple nod or a wink. We may say that liquidity is likely to be taken out of the system in six months time (or whenever), and that might bode well for people shorting over longer term and who are prepared to take the risk, but what about tomorrow, next week etc? Unless you can read uncle Ben's mind your guess is as good as anyone's. I wonder why on the serious hint 'tightening to come' the early after market falls we saw a few days ago weren't sustained. Finally, the equity market conditions may be governed by liquidity AT THE MOMENT but I wonder whether that will always be the case; is it possible that it could return to 'fair-value' (it isn't at the moment) at some time in the future and if so when?

Chabazite

Just a couple of thoughts on this issue. Are we saying that liquidity overrides all? If so then what about technicals? I have seen some really beautiful analyses on this site and elsewhere supporting either the bull or bear case, but if liquidity is king then technicals have little or no value; the picture can all be upset with a simple nod or a wink. We may say that liquidity is likely to be taken out of the system in six months time (or whenever), and that might bode well for people shorting over longer term and who are prepared to take the risk, but what about tomorrow, next week etc? Unless you can read uncle Ben's mind your guess is as good as anyone's. I wonder why on the serious hint 'tightening to come' the early after market falls we saw a few days ago weren't sustained. Finally, the equity market conditions may be governed by liquidity AT THE MOMENT but I wonder whether that will always be the case; is it possible that it could return to 'fair-value' (it isn't at the moment) at some time in the future and if so when?

yelnick

Chabazite, a liquidity-driven market due to credit is what Prechter has missed since 1987, missed in 1994 and again in 2002 and again now. Until the excess bubble liquidity fails to work, or is withdrawn, the market will be riding on air. This doesn't mean TA is wrong, or waves are wrong, it means they will reflect this new condition. In the bubble years of 2004-2007 or since Mar 2009, we had almost no reversals down more than 10%, a bit unusual. Applying pattern recognition from 1929 or whenever will fail.

Roger D.

This count is really starting to come together IMHO.

Roger

http://www.screencast.com/users/fast996/folders/Default/media/10160aef-d41a-4125-b504-ebf8f95260e0

Taz

Hi Chabazite

While liquidity is an important facet in markets, it is really only important if it is being put to work. Liquidity may amplify the existing trend but it by itself, is not the cause. It is only one variable among millions of other variables that determine the investor mindset. At the end of the day conviction trumps liquidity and the charts highlight conviction very well.

Mamma Boom Boom

>... however, in the real world none of that really applies to the equity market given that it is LIQUIDITY driven.<

Ok, that's it. Lock the doors and flip on the siren. We're on full 'clown alert'.

Roger D.

In the real world the Fed,which is politised and run by the banks will never withdraw liquidity in this current situation. The stock market is driven by profit and without spending their screwed. You can only cut costs so much.

This notion that until the Fed starts to withdraw liquidity we will continue to see higher prices is a pipe dream,plain and simple.

Deflation is here and it is gathering momentum as I write. This BS from Bernanke is for the masses. The M1 multiplier is reading our banking system is currently rated "banana republic" and until it undergoes some serious shrinkage, nothing will improve,no credit growth no real GDP. End of game.

Roger

Roger D.

The supercycle wave 2 top in 3M

http://www.screencast.com/users/fast996/folders/Default/media/936b061b-9125-492d-bfce-5e929be8a814

Dave B.

"Can you post one thing that isn't an exaggeration or wrong?" - DG

Congratulations DG!
What's wrong is the fact that YOUR Reading Comprehension leaves a lot to be desired.

Once again, you have shown everyone here just how poor your Reading Comprehension is . . . I never stated anywhere in my post that Rosenberg recommended shorting the equity market. I simply said, (and I quote) "If you had been influenced by David Rosenberg at Gluskin-Sheff . . ."

Seriously, you sound like one of those high-strung college kids that enjoys arguing simply for the sake of arguing. Time to try removing your foot from your mouth, dude.


Dave B.

"Chabazite, a liquidity-driven market due to credit is what Prechter has missed since 1987, missed in 1994 and again in 2002 and again now. Until the excess bubble liquidity fails to work, or is withdrawn, the market will be riding on air." - Yelnick

Thank You, Duncan!

At least someone around here has been around long enough not to confuse equity market valuation with the fundamental economic backdrop - - - not too mention what has been driving this market over the last 12 months.

usdollar

Roger,
I would put wave A on the correction one top back, makes wave B elongated flat, then from the bottom of B to the bottom of this recent correction make a trend line.
Then from top of A past correction top you will get a new top wave C of X??? An irregular flat correction wave C. Probably coming in within 100 points of previous top within a month or so. There is still life left in this correction.

Roger D.

Goldman Suspends Simon Property Group Rating

http://www.zerohedge.com/article/goldman-suspends-simon-property-group-rating

http://www.screencast.com/users/fast996/folders/Default/media/594b6725-9a1a-43ed-9b81-21f8f0482d0d

trendlines

We've reached a short-term "fork in the road" on the SPX. Expecting a decisive move towards 1126 or 1080 within this week:

http://trendlines618.blogspot.com/2010/02/s-short-term-fork-in-road.html

Momentum is in the upward direction

Mr. Panic

T minus 3 trading days. The collapses of 1987 and 2008 began the first week of the new trading month with a 2.7% down day on Oct.6,1987 and a large-barred reversal day on Sept 2,2008 (maybe 3%daily range)with a 3%down day 2 days later.

Roger D.

Not to jinx it but the ES has a nice little H&S on the 60 minute chart,about a week long and targets 1070-1065 area....hoowaaaa!

What this pattern needs is a nice 300 pt down day,to get the Bulltards a liitle nervous.

Btw S&P says there could be a couple downgrades in Greeces 30 day future and the Euro squats. But wait Kalifornia pulls it's 2 billion GO bond sales,who needs Greece?

David

i have posted a count for the aussie market if anyone is interested. seems like wave 3 has started.

http://www.tradeyourwayout.com/2010/02/xjo-elliott-wave-update-daily-chart.html

Taz

Nice to see a fellow EWer. While I am looking for a 41 handle in the near-term I think wave b (youe wave 2) is not complete. Pullback in gold looks tame and the rally into the receent top for the asx 200 had just enough momentum to warrant a retest after the customary pullback.

Mike McQuaid

Give it a rest Roger D. You have wave 1 down on the Dow in '08. Off the '07 high to constitute your wave 1 that's a 6,000 point move! Bogus. Give us a 5th wave target off that! Forget it.

230 down

approximately 230 points down on dow today. but nothing to support it other than my gut. but didn't godel prove there are truths we can't prove?

Roger D.

Mike,

Better get short here beacuse the bullshit is over with and a possible huge diagonal down is always a possibility.

Roger

p.s. In the land of the blind the one-eyed man is king.

DG

"Once again, you have shown everyone here just how poor your Reading Comprehension is . . . I never stated anywhere in my post that Rosenberg recommended shorting the equity market. I simply said, (and I quote) "If you had been influenced by David Rosenberg at Gluskin-Sheff . . .""

Yeah, so I guess in your world, it's fine to imagine the negative impact of a trade Rosenberg DIDN'T recommend (short equities) and ignore the positive impact of a trade he DID recommend (long high-grade bonds) to determine whether his advice is good or not.

BRILLIANT!

Roger D.

Here's a roadmap for anybody that needs one.

Good luck,

Roger

http://www.screencast.com/users/fast996/folders/Default/media/76a43af7-bcd2-4886-b372-e725779cf2e7

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