NOT A CII was NOT going to bother commenting on a recent BusinessWeek cover, as its Escher like approach is clearly NOT a Contrary Indicator.

However, BusinessWire has forced my hand, erroneously implying it WAS:  BusinessWeek Cover: Why The Market Will Keep Going Up, writing “This can’t be good.

I believe  they misunderstood the nature of the cover indicator. This is decidely not a contrary indicator, as it is ambivalent about market direction, taking both sides of the issue.

BusinessWeek is practically the poster child for the magazine cover indicator. Recall the infamous “Death of Equities” cover.

Don’t jump to conclusions so fast. BW seems to have learned their lesson.

The cover article Why The Market Will Keep Going Up looks like a contrary indicator — but its not.

Why?

CI A NOTHave a look at the second graphic at bottom right — its the same Oct 5th magazine cover — turned upside down. It states “Why the Market is Going Nowhere.”

Hence, the Yin/Yang approach.

Given the dual nature of the cover, we have to say it does not qualify as a contrary indicator.

>

Previously:
BusinessWeek: The Death of Equities (August 13th, 1979)

http://www.ritholtz.com/blog/1979/08/the-death-of-equities/

Understanding Contrary Indicators (May 31st, 2008)

http://www.ritholtz.com/blog/2008/05/understanding-contrary-indicators/

Falling Home Price Magazine Cover (August 12th, 2009)

http://www.ritholtz.com/blog/2009/08/falling-home-price-magazine-cover/

Sources:
Why The Market Will Keep Going Up
Roben Farzad
BusinessWeek, September 24, 2009, 5:00PM EST

http://www.businessweek.com/magazine/content/09_40/b4149040663646.htm

Searching for True North
Roben Farzad
BusinessWeek, September 24, 2009, 5:00PM EST

http://www.businessweek.com/magazine/content/09_40/b4149040663646.htm

Category: Contrary Indicators, Financial Press

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

30 Responses to “NOT A CONTRARY INDCATOR: Why The Market Will Keep Going Up / Nowhere”

  1. ItalicBold says:

    The market will keep going up (nominal) / nowhere (real).

  2. jc says:

    Nowhere is not the opposite of up, it’s still a contrary indicator if they can’t bring themselves to use the word “down”. They’ve just looked foolish too often so now they hedge their covers. Not to be conused with covering their hedges…

  3. HarryWanger says:

    The market will keep going up as long as the dollar continues to fall. This is a no brainer. On the other thread I mentioned that the dollar was around 72 in spring of ’08. If the dollar hits that level, and I believe it will, we may see the Dow somewhere in the 12,500-13,000 range. This is pretty much a given and easy money at this time.

    Going nowhere? In a sense, yes since it’s truly only moving on the dollar weakness. But that can change with some supportive underlying growth and strengthen the move. Then we’ll really “be” somewhere. Either way, it’s a win-win on the long side.

  4. KevinM says:

    I notice they could not muster the scrotum to use the word “down”.

    Ask your local 5 year old: “The opposite of up is…”

  5. Holy crap!! Has anyone seen Gold today? It’s up to $1,040. That’s not good. The party might go on a while longer but this isn’t going to end good(again!!).

  6. CNBC Sucks says:

    The market can keep going up and still be going nowhere.

    Given how central banks keep jerking around with the fundamental economics of supply, demand, and innovation through money printing and counter money printing, there is a lot of currency inflation that is being repressed, thereby inflating even real — not just nominal — asset returns. The global economy of US trade deficits and debt is fundamentally out of balance, but central banks around the world are managing to keep US inflation repressed. The great Schumpeterian economist named The Great CNBC Sucks calls this phenomenon REPRESSED INFLATION, or REPRESSION. ;)

    Speaking of repression, Ritholtz, your comments are becoming more and more repressed because that sneaky Andy T (sneaky in more ways than one, I will tell you) has a blog that has stolen some of your regulars, including Andy T (of course), karen, ahab, Mannwich, leftback, Thor, and cvienne. What a bunch of clubby elitists!

    The Great CNBC Sucks would not care so much, except that I do not want to post on Andy T’s blog just to write: CVIENNE, will you approve my Ritholtz fantasy football trade already?

    ~~~

    BR: We have no inflation –yet.

  7. HarryWanger says:

    Calvin: Why do you think higher gold indicates that “this isn’t going to end good(again!!)”? I see no correlation there. Also regarding the markets continued rise. In addition to the dollar weakening, read this from Bloomberg:

    JPMorgan, Goldman Sachs and Intel’s fourth-quarter gains will be marked by easy comparisons to last year, when credit markets seized and banks choking on billions of dollars in real- estate losses stopped lending. U.S. gross domestic product shrank 5.4 percent a year ago and consumer spending stalled.

    Financials First

    Analysts project S&P 500 financial companies’ fourth- quarter earnings will more than double from a year ago, when five of the six biggest banks reported a loss of more than $1 billion, according to estimates compiled by Bloomberg. Financial institutions worldwide have reported more than $1.6 trillion in credit losses and writedowns since 2007, Bloomberg data show.

    Earnings are going to rocket this market much higher.

  8. HarryWanger says:

    An economic indicator worth noting regarding retail sales. September will shock to the upside. Did anyone notice Goldman Chain Sales and Redbook today? Both indicate a much stronger than expected September in sales. More fuel to fire this market higher as well.

  9. dead hobo says:

    HarryWanger Says:
    October 6th, 2009 at 12:13 pm

    The market will keep going up as long as the dollar continues to fall. This is a no brainer

    reply:
    ——–
    Gee Harry. Textbook economics says a falling dollar will increase US exports because the relative price of US goods is going down. So far so good, you might be on to something.

    Textbook economics also says world wide excess capacity caused by slack demand will have a dampening effect on demand in this instance. It also means that the price of US imports will rise. Since necessities will rise in price uncontrollably, this means that discretionary purchases will slow down. So, we will have both asset inflation and deflation at the same time. Both rising unemployment and rising prices for some things and falling prices for other things. The rising prices will center on necessities. The falling prices will center on things people can do without.

    .This may be a problem in your analysis.

    Since Japan still has a little deflation problem going on, I don’t think they’ll be looking for many US bargains. China is waiting for US demand to pick up for it’s salvation. Ha Ha on them. Europe is supposed to have a few issues of its own.

    So, please explain the no brainer stuff you pointed out. My brain is missing something. Is this day trader logic or sales pundit logic?

    I don’t disagree the market may rise, but the only reason is painted tapes and Fed sugar.

    Your thoughtful reply will be most anticipated.

  10. The day after the WSJ declares gold a bad investment(and they are wrong about that too. It is not an investment, it is currency insurance!) it hits a record high. Talk about bad timing

  11. dead hobo says:

    Retail sales per ISCS-GS

    ICSC Research expects same-store sales for September,
    excluding Wal-Mart, to fall about 2.0 percent from a year ago.
    —————————————–

    H Wanker, How is an anticipated 2% year over year fall going to blow the roof off of the stock market? Better than expected? How’s that ice cream stain on your forehead doing?

  12. HCF says:

    Dollar goes down, stocks go up…

    So we export more Boeings and Caterpillars, but can’t afford to import anything from anywhere except China (because of their currency peg). Large corporations are fine (and subsidized), while the average household gets screwed. I have no problems with what markets do (when they aren’t manipulated), but I do have great issue with the policy direction we’re taking. Capitalism is dead, long live capitalism!

    HCF

  13. HarryWanger says:

    deadhobo: “Textbook economics also says world wide excess capacity caused by slack demand will have a dampening effect on demand in this instance.” That’s true except that it isn’t happening right now.

    My “no brainer” regarding equities are that as long as the dollar weakens (to an extent – below 70 is not good), the markets rally. It’s pretty simple. But you are correct, if the dollar continues below 70, we have trouble. I’ll book profits again if that seems inevitable.

  14. emmanuel117 says:

    Weak dollar = higher energy prices.

    Keep moving those goal posts, Harry.

  15. dead hobo says:

    HarryWanger Says:
    October 6th, 2009 at 12:47 pm

    deadhobo: “Textbook economics also says world wide excess capacity caused by slack demand will have a dampening effect on demand in this instance.” That’s true except that it isn’t happening right now.

    reply
    ———
    H wanker, even your own ISGS numbers disagree . On what planet are sales of anything going up? Where’s your excess demand now? Name one place. Do you just make this shit up or do you really believe it? Or are you trolling for dumb money?

  16. HarryWanger says:

    emmanuel: you are correct on the energy prices but we’re far from that having an effect on the economy right now.

  17. HCF says:

    @Harry:
    >if the dollar continues below 70, we have trouble.

    Of course, we know that the Fed will engineer a perfect landing of the dollar at the 70 level… They’ve never fucked anything up before, have they?

    HCF

  18. HarryWanger says:

    deadhobo: ISCS full report:

    Cooler weather gave seasonal sales a boost in the Oct. 3 week, according to ICSC-Goldman’s same-store sales tally that rose 0.3 percent vs. the prior week for a year-on-year rate of plus 1.0 percent, next only to a 1.6 percent rate in the Sept. 12 week as the best year-on-year rate since November. The report is nevertheless calling for a full-month September decline of 2.0 percent year-on-year though it does say the bias is to the strong side.

    Redbook full report:

    Redbook reports strength in store sales with its same-store tally pointing to a 0.4 percent month-to-month rise in September. This call points to a gain for the ex-auto ex-gas category of next week’s retail sales report from the Commerce Department, a gain that would offset what seems certain to be a steep overall decline tied to the end of cash-for-clunkers. Redbook’s specific tally for the Oct. 3 week shows a 1.9 percent year-on-year decline, the best reading since early summer…

    Retail Sales will surprise based upon these reports.

  19. Thor says:

    Harry – we all know your record of predicting these numbers. Why do you even bother? Do you enjoy being eviscerated by the folks here?

  20. dead hobo says:

    H wanker,

    using your own post above:

    The report is nevertheless calling for a full-month September decline of 2.0 percent year-on-year though it does say the bias is to the strong side. (How is a 2% decline biased strongly in a good way? Were they ‘expecting’ 5% decline?)

    Redbook’s specific tally for the Oct. 3 week shows a 1.9 percent year-on-year decline, the best reading since early summer… (How does down become up in your world?)

    Down is the new good? What’s wrong with you?

  21. dead hobo says:

    H Wanker,

    What’s the composition of the spending? How much is for discretionary purchases? Was the bias upward month to month focused on a downsized way of life or are you just measuring inflation?

    Sorry Wanker. I’ve got a large pile stashed away and it’s not going to be bet on red, especially when I know the game is crooked.

  22. impermanence says:

    Harry Wanker writes:

    “Going nowhere? In a sense, yes since it’s truly only moving on the dollar weakness. But that can change with some supportive underlying growth and strengthen the move. Then we’ll really “be” somewhere. Either way, it’s a win-win on the long side.”

    Although you have put a bunch of words together, there is no meaning. Perhaps you have political aspirations?

  23. investorinpa says:

    Ok Barry, here ya go…this is from your post a few weeks back:

    http://www.ritholtz.com/blog/2009/09/gold-passes-1000/

    Barry said “Its rather meaningless.

    The $1,000 mark is much ado about nothing — or very little. The more significant number is $1033.90 — the recent high set in March 2008. A solid breakthrough of that price level to a new high on a closing basis will be significant from a technical perspective.

    I would be more inclined to buy a close over 1040, as proof that Gold has broken out for real . . . .”

    My bloomberg is tellin me gold is exactly at 1040.10 at the moment, a few mins before one of the many Gold market closings…so lets hear from ya BR

  24. HarryWanger says:

    Thor: I was quoting from Bloomberg.

    deadhobo: Down but improving. Redbook is showing month over month increases. That’s good news and shows some consumer strength is returning.

  25. I-Man says:

    Whats happening??? Why isnt the market going up?????

  26. dead hobo says:

    HarryWanger Says:
    October 6th, 2009 at 1:59 pm

    deadhobo: Down but improving. Redbook is showing month over month increases. That’s good news and shows some consumer strength is returning.

    reply:
    ———
    Or it might be a response to inflation plus seasonal trends. How does consumer strength return when unemployment and underemployment are at 20 year+ levels. Are people blowing their unemployment checks on good times? Where is the strength coming from?

    The only reason I waste time on you is because I think you’re a sales shill who is trolling for dumb money. I am offended by you. And some part of me feels the need to protect people from you. Thus, I am responding to your retarded analysis and shill style analysis.

  27. emmanuel117 says:

    DISTRIBUTION DAY

  28. I-Man says:

    What do I do Harry???

    Honey, get Brian on the phone… NOW!

  29. vv111y says:

    The cover says uncertainty. The contrary is that we can be certain.

    $0.02

  30. HarryWanger says:

    I-Man: “Whats happening??? Why isnt the market going up?????”

    The market is going up. Have you looked at the indices today?