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NOT A CONTRARY INDCATOR: Why The Market Will Keep Going Up / Nowhere

Posted By Barry Ritholtz On October 6, 2009 @ 11:30 am In Contrary Indicators,Financial Press | Comments Disabled

NOT A CI [1]I 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 [2], 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 [3]” 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 [4] looks like a contrary indicator — but its not.

Why?

CI A NOT [5]Have 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.” [6]

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 [3] (August 13th, 1979)

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

Understanding Contrary Indicators [7] (May 31st, 2008)

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

Falling Home Price Magazine Cover [8] (August 12th, 2009)

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

Sources:
Why The Market Will Keep Going Up [6]
Roben Farzad
BusinessWeek, September 24, 2009, 5:00PM EST

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

Searching for True North [9]
Roben Farzad
BusinessWeek, September 24, 2009, 5:00PM EST

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


Article printed from The Big Picture: http://www.ritholtz.com/blog

URL to article: http://www.ritholtz.com/blog/2009/10/bw-why-the-market-will-keep-going-up-nowhere/

URLs in this post:

[1] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/10/NOT-A-CI-.gif

[2] BusinessWeek Cover: Why The Market Will Keep Going Up: http://www.businessinsider.com/business-week-cover-why-the-market-will-keep-going-up-2009-9

[3] Death of Equities: http://www.ritholtz.com/blog/1979/08/the-death-of-equities/

[4] Why The Market Will Keep Going Up: http://www.businessweek.com/magazine/toc/09_40/B4149magazine.htm

[5] Image: http://www.ritholtz.com/blog/wp-content/uploads/2009/10/CI-A-NOT.gif

[6] “Why the Market is Going Nowhere.”: http://www.businessweek.com/magazine/content/09_40/b4149040663646.htm

[7] Understanding Contrary Indicators: http://www.ritholtz.com/blog/2008/05/understanding-contrary-indicators/

[8] Falling Home Price Magazine Cover: http://www.ritholtz.com/blog/2009/08/falling-home-price-magazine-cover/

[9] Searching for True North: http://www.ritholtz.com/blog http://www.businessweek.com/magazine/content/09_40/b4149040663646.htm

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