Tuesday, Jul 07, 2009
David Rosenberg puts a generous valuation on the S and P at 650.
Zero Hedge: 40% Dead Cat Bounce
and thinks new lows likely. I hear similar stuff from Albert Edwards Felix Zulauf who are def worth checking out
Posted by bellwether @ 04:09 PM (1560 views) Add Comment
16 Comments
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1. gone-to-colombia said...
I agree with everything, I can understand, that he says.
2. hubbers said...
On the subject of Japan's 14 year long lost decade.
"Nobody built more bridges than Japan. Japan doubled their debt to GDP ratio and look where they are today"
Brown can't spend his way out of this. No matter how much he steals from our children. Maybe he just wants to spend enough to get re-elected. If that is what he is doing - how morally bankrupt is that?
3. techieman said...
$50 X 12 = $600 . 13 is generous - see shilling too.
4. techieman said...
so b/weather are you now erring on the dark side - you were saying before that we shouldnt count on this as a bear market rally - changed your view? You know mine.
5. peter_2008 said...
May be bit off topic. Something intertesting is happening to FTSE 100. Despite the lack of bad new and a lot of "no-news" news and a lot of supposed "good" news, FTSE failed a rebounce on 4 consecitive occasions since last Thursday. Closed 8 weeks low at 4187 today.
The interesting bit was that on every session there was a initial substantial rebounce following claims like "Scrappage scheme boosts orders" by BBC, "HPC is over" by BoE member and "recesseion is over" by BCC,and then just fell off the cliff later afternoon.
What's happenning? Suddenly everyone sees the reality now? Maybe just bad weather?
6. Ftb Dave said...
@peter_2008
The city is desperate to return to normal i.e. growth, profits and of course bonuses so they are searching for the light at the end of the tunnel and pounce on any "good news". The US markets open and drop so FTSE follows as it generally does over med + long term.
Just my thoughts as I have got evidence or stats to back up this up.
P.S. Maybe they are just sad M Jackson has passed away......
7. bellwether said...
Hi Techieman, I'm far more on the dark side than not. Kind of always have been although initially didn't want to totally discount inflation as a lot of people seem to think it will happen and soon eg Marc Faber.
My views like yours are however significantly defaltionist which infers eroded earnings in real and nominal terms and lower stocks once the hope is snuffed out.
Currently short on the FT and short £v$ although only modestly as the timing is going to be difficult. I'm particularly concerned that fake earnings from financials and the PPT might force things up until the autumn when we might get a rerun of something like last year with new lows or retested lows before another spring rally!
8. techieman said...
b/wether yes re the £/$ i expressly agreed with you there, although that was on a post about the $ being finished or "toast" as someone put it. (ill find it after this post)
yes expect some rallies to get the bears out. Personally i am short S&Ps and long Eur / GBP. I did actually think that FTSE would go up around 4270 yesterday or today before coming back - who knows there may be some head scratching if the shorts are squeezed a bit. I still see one of 2 scenarios (S&Ps) - a 50% retracement from the move up from March and then going on to breach the June high OR continued falls with a brief stop at around the 50% level. I will be shocked if we dont find support at that 50% level for a while.
Still thats counting your chickens a bit, first we have to breach the neckline of the H&S, then have the traditional pull back to it.
I got short at 913 saw it down to 888 then back up to 926 when i added more as it just seemed too textbook [ typical of a bear squeeze] and now its testing the 880 level (which is important) as we speak.
I take no notice of Marc Faber - i like precther and shilling (both deflationists) and schiff ( who isnt and says that current dollar strength is "perverse"). As you know my view is the market tells us when to expect inflation not the pundits.
I have a question for you - when you see something go your way and then come back against you do you feel as if that unrealised gain was yours and disappointed that its come back?
9. techieman said...
Peter 2008 - yes that must be it - bad weather!
B/weather found it - http://www.housepricecrash.co.uk/newsblog/2009/07/blog-global-currency-24169.php
mine @ 9
"Expect $ to go higher against both EUR and GBP (perhaps after one last push in the other direction).
Expect EUR to go higher against GBP
This morning i got out of a bit of my EUR position @ 8620 (its now 8580) bought @ 8470. Was expecting it to come back a bit because there is a descending trendline that one the FIRST go it was probably going to have trouble breaching. We may still be in a downtrend (in the Sep futures) which is why i said it was a bit dangerous. A chart would probably help you to see what i mean.
Of course not 100% sure i am right and its not meant to be a piece of advice to buy / sell just an opinion."
So am long Euro / GBP and added to that on the pullback to the one hour OHLC bars trendline. Position now is a stop at more or less b/even on the whole position (which would have to break a fair bit of support to get hit).
I personally - am looking to add to both of these positions, plunge protection team or not!! Having said that because of what you said i think the $/GBP might be more volatile than the Euro.
In all cases though its really early days on these positions and i would be the first to concede it could all go "t1ts up". But hey thats futures!
10. bellwether said...
Checked out Gary Shilling and found this which seems really consistent with the views I'm most drawn too. Agree with you on Faber but some people rate him.
http://www.fundmymutualfund.com/2009/07/gary-shilling-recovery-year-away.html
If the market is heading down getting savings out of sterling or at least hedging on a trading account has to make sense. This will be a carbon copy rerun of last year for sterling I'm sure.
If something goes my way and turns I do think of it as a loss, although actually I've totally taken a step back from trading as it takes too much time and I tinker too much. Frittered away £10k+ over the past few months ( alot of it on actual trading costs) establishing that but a lesson well learned. I do take positions but only when I see something clear emerging that looks worth sitting with, which might not be often. My short positions might represent that but even if they don't they are at least a hedge against some equity positions that I hold and don't want to sell.
11. techieman said...
After having done this for a while i can tell you its really difficult. For example I said i sold @ 913 and saw it down to 888. Now when i first started i would have moved the stop to break-even when it went down to 888 [or got out of some and then moved the stop to b/even] got hit and then would have found it difficult to re-short. I remember a while back you said you didn't use stops. I kinda know what you mean. My knowledge told me that there was a good probability that the high @ 953 was the high for a while basis Sep. So i just kept the stop there, and got more short as i said.
To do that you have to grit your teeth (not to mention have enough margin!) and i still find it hard. I think the last thing to say is never ever see it as money - they are points / ticks / pips whatever but it isnt money. [i mean as soon as you start thinking ive lost or am making £x your judgement is impaired.]
I hope things work out for you b/wether, as my first mentor told me you can be right about the market and still lose money - that's just how it is. To me you seem very switched on, alot of this stuff i still "dont get" but thats the point sometimes you really dont need to get it. If you did you would probably believe in EMH and then you would be completely farquaharsend!
12. techieman said...
since i'm in a bit of a verbose mood ill say one more thing that i was told after reading lots of books which always said get your stops to b/even asap. To me now that's not right.
Of course you want to reduce risk but i also don't agree with having your target profit being 3 times your initial risk - etc. Thats all too contrived. No, the point is a stop needs to be somewhere where if it gets there you are just plain wrong about what you think the market is doing. Now that might be (for a bull position) below where you got in, or above where you got in rarely will it be (and i think it should only coincidentally be) exactly where you got in.
Sorry to babble on - was waiting for the close.!!!
13. bellwether said...
Thanks T, you are right about not thinking of it too much as money, although the opposite can happen where you don't take it seriously enough and just gamble for entertainment. I think I got the worst of this, where I saw gains as real and took them too early and losses as simply numbers and held them too long.
It's def an intresting experiment and the losses weren't fatal and fortunately Mrs B is very understanding! I think my biggest frustration was seeing the trend and not benefiting from it. I wrote about the March rally before it happened yet ended up losing because of 2nd 3rd 4th guessing things. I actually bought the S and P at 719 and could have made a great return if I had just held. I guess its clear opps like that I'm looking for now and if there isn't one for a few months then fine.
Fortunately the losses broke the addictive aspect of trading for me, my own personal revulsion to stocks. Can now go days without checking stuff which actually seems to work. I do think I do better when I stand right back otherwise there is too much self generated noise.
Talking about self generated noise just challenged you on the verbosity stakes!!
14. techieman said...
yes i remember you calling the bull move - particularly about the financials at the time, it looks so simple now! I agreed with you at the time that we would have a bull move but you may have given an earlier call (i think that most of the folks here thought we were nuts), but my technical level was 3950 on the FTSE - where i actually got stopped on some small position shorts.
If i had been right on the short side 3950 would have held, and i would have built up a bigger short position. I was proved wrong by the market (my point) so then the move up from there to 4500 to me made perfect sense then. It still does even on the fundamentals. I also remember your short of the Euro (which i didnt agree with at the time - although again since i was long from quite a lot lower the money management kicked in and i lost out on a profit only) so you were right and i was wrong. Hope you are right again and the FTSE shorts do well -for one thing i probably have an aligned VI with you!
Personally i think the next stimulus (assuming there is one) will co-incide with the shorts getting squeezed but i think the market will then say so what and it could even go lower quite quickly thereafter. Alternatively it could be here where the 50% retracement level co-incides and then the market could march on... But time will tell. If i dont get stopped on this short S&P position then i will PROBABLY at least partially bail around this 810 level, before waiting for another rally to re-short., unless of course the patterns tell me something else.
The bloke on CNBC that you have highlighted makes sense - don't buy the rallys - rent em!
Take care and Goodnight! b/wether.
15. charlie brooker said...
@5
Peter - certainly one of those instances was caused by bad US jobless figures last week.
16. Charlie Brooker said...
@5 Last night is it was falling oil and metal.