The Dow bounced into positive territory for the year today. SPX did the same earlier this week.
Will the 2Q be any better than Q1? What else is in store for the coming year?
And more importantly, what might you be VERY wrong about? (That’s the question that keeps me up late at night!)
~~~
What say ye?
Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.
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"The Greek offer is not sufficient and they have to go away to come up with a revised plan," said a spokesman for the German Finance Ministry. The Greeks must first have a plan that satisfies the Germans which this comment states they clearly don't yet and then the Greek Parliament will vote on it this weekend. This said, whatever package gets voted on in Greece is basically an up or down vote on euro membership so we are entering another uncertain weekend for global markets. A failed vote will likely lead to a hard default which may be what...
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March 4th, 2010 at 5:54 pm
no.
March 4th, 2010 at 6:45 pm
I think so…Don’t think the whole thing implodes until July. But, then I just see so much Pumping until the Health Care Bill gets passed.
Apparently, the wealthy are buying a Tiffany. They are flooding the “High End Stores” with purchases for Yoga and Dr. Susses’s “Whizzers and Bangers” and the rest of us at desperately hitting the “Home Iprovement Stores” to refit our “Rental Properties, Vacation Properties and our Basic Homes with Granite Counter tops and Improved Bathrooms.
I don’t see how we can fight this latest Euphoria…. But, I think it’s the last “GASP” before “REALITY” sets in. But, I’m a Perma Bear….but always looking for the “bright side of folly.”
Hey…I think it goes higher…but there might be a March 9 dip ….in sympathy and then “off to the races for a few months.
March 4th, 2010 at 7:05 pm
Maybe not…
But then we might get another +7% before this month is over.
This continues to look like classic recovery… will bear $80/shr on S&P500 EPS for the year.
March 4th, 2010 at 7:05 pm
Er… will BEAT $80/shr…
March 4th, 2010 at 7:24 pm
ERRRRR positive for the year??? ?????? I think not until we take out 1150? What Are you looking at???
~~~
BR: 12/31/09 Market Close Prices:
March 4th, 2010 at 7:44 pm
tuesday anniversary date of march 09 low,so, we fall in panic for two weeks is my guess
this has been very low volume very for last 7 days, copper cracked, oil is up, oil companies down down down, lotta cross currents
swag, many cross currents
china prineted lower pmi and a very sorrowfull ism that fell of da cliffs, plus, some clamping down on runaway bank lending, yeah, seems they were handing out money like napkins to some folks who pray tell did not invest in china infrastructure and took huge loans and specky-lated
in full disclosure, im short the 500 and russell and might go with the dog next
state and muni lay-offs have begun
March 4th, 2010 at 8:04 pm
That Low Volume. Even Pumper CNBC keeps talking about “Low Volume.”
I wonder how a “Pumped Market” still exists on “Low Volume” when it must be very hard for the “Day Traders” to deal with this? We are sort of “sideways.”
Not much one can do with that.
But, then, I’m just a small investor. I’m into Dividend stocks since my MM’s are giving me such crap returns. They can’t even lend my money out so I get a better interest rate…so I’m paying to park my cash…to sit there with low returns in CD’s that end up “just parking.”
The Dividend side is still Okay. I’ve tried to pick stocks that aren’t in danger of cutting dividend…but who knows ..these days. Still a 2% or more in a Dividend makes up for that “Down Turn” that’s coming and I can still sell out…since I got out of my Mutual Funds in 401-K/IRA which makes it so much easier to just SELL on my order..and then move into something else.
March 4th, 2010 at 8:17 pm
Already starting to remind me of…. when the Dow was at 14,000.
And we’d go WTF? This is not real.
Still not real.
So do not expect a semi-rational, semi-insane person outside of the fed and GS to have a clue.
PPT forever. Spend, spend, spend.
State and muni layoffs? Say what? So what.
Hey Greece just got rescued. Party hardy.
March 4th, 2010 at 8:18 pm
“Will the 2Q be any better than Q1?”
No. Sell in May (April may be better this year) and go away. It’s also a mid-term election year.
March 4th, 2010 at 8:22 pm
Its funny that people say “low volume”.
Generally I think its best to “fade volume”. That is, “sell high volume rallies” and “buy on high-volume dips”.
Low volume more strongly suggests a grind in the same direction.
March 4th, 2010 at 8:31 pm
TakBak04 said”
“I wonder how a “Pumped Market” still exists on “Low Volume” when it must be very hard for the “Day Traders” to deal with this? ”
———————————————————————————————————————–
Reply:
I can only speak for myself, but in this kind of market environment, day trading is so much easier than making long-term investment decisions. Day trading (great March after all of 4 days) I am only concerned with short-term price action and immediate direction over the next few minutes to hours. Swing trades extends the time frame to a few days. Successful investment decisions, however, require that I have a sound long-term view of the future, which is much more difficult. That’s why BR makes the big bucks.
March 4th, 2010 at 8:37 pm
cognos Says:
March 4th, 2010 at 8:22 pm
Its funny that people say “low volume”.
Generally I think its best to “fade volume”. That is, “sell high volume rallies” and “buy on high-volume dips”.
Low volume more strongly suggests a grind in the same direction.
——-
Many Traders are saying the Market has “High Volume on the Down Side” these days. They aren’t seeing “High Volume on the Up Days.”
I guess what you say about “Grind” in the same direction is what it is. But, those “Black Box’s” just keep chugging along…in their “sideways grind.” :D
March 4th, 2010 at 8:46 pm
@ kmckellop
SPX closed 12/31/09 1,115.10 (not 1150).
DJIA closed 12 /31 /08 10,428.05
March 4th, 2010 at 8:51 pm
What Might Go Wrong, BR?
Rahm Emmanuel might resign Mid-Year and Geithner might go somewhere before then.
Some Buzz around the Left Web Blogs.
What would a “Shake Up” in Obama Administration do to the Markets? There’s a lot of judgement placed on Obama’s Caving to the same folks who ran Bush II.
If that changes…what would happen to the markets? (That keeps me up at night) And, I don’t think it’s far fetched to speculate that Obama is going to be forced or by choice to make some changes in the coming months.
Although…given what I’ve seen…I would assume the Replacements would give more comfort to the Markets than a Radical Change would disrupt. I don’t see this President doing more than a small “incremental shift” but it would be good for Traders when the news broke…to make some fast bucks. Not so good for us “Long Termers” as we would need to take some Valium before it all blows over and we realize the changes were not much different than what he came in with.
(BTW: Full Disclosure: I voted for Obama…for the Change that now doesn’t seem what we Could Believe In)
Since it won’t be much change…but some trading volatility….I’d still expect we slug along with most news driving markets comes from outside US…unless Cheney get’s off his leash once again and does some rattling here at home..(Terra Incident) which seems to always advantage someone…somewhere and roil markets a bit.
March 4th, 2010 at 9:29 pm
I keep waiting for the next big external event to tank the market. Earthquake destroys SF and LA. Bubonic plague in Atlanta. China invades Taiwan. China invades Mexico. Iran nukes Israel. If something doesn’t happen, I’ve missed a helluva rally.
March 4th, 2010 at 9:36 pm
I might be very wrong about the extent of the Big National banks exposure on their secured lending side and the dependency of the overall market on the financials to keep raising all ships in a storm.
But I don’t think I am. I don’t think they wrote as many terrible deals as people think they wrote and I think most of their money is still pouring in.
You had some slugs doink them a bit on the unsecured but as far as the stuff they have tied into New construction, I think for now they are still pretty solid. Nobody’s walking away from these places. They’d be nuts and they have nowhere to go from there.
March 4th, 2010 at 9:39 pm
I am profoundly disturbingly negative on the economic future on all fronts and expect it to turn violent on a dime.
I’m hoping I’m wrong.
March 4th, 2010 at 9:45 pm
Porsche87 –
The way I think about this is- there is always “event risk”. Stuff like, “meteor hits NYC”. Or “big company reveals fraud”. The question is then, “are you getting paid for event risk?”
It seems like today, fear is high. But risk of event is the same. One is well-paid to take “event risk”.
March 4th, 2010 at 10:03 pm
TakBak04,
Could you provide some links for that?
If Obama canned Rahm and Timmy it might actually restore some of my confidence in the man. I think he’s got good intentions, just surrounded himself with (or got surrounded by) the wrong people.
March 4th, 2010 at 10:23 pm
@Mr.E. Says:
SPX closed 12/31/09 1,115.10 (not 1150).
The way I see it ,we are positive from last year not positive for this year.
I say sell in May and short in August.
March 4th, 2010 at 10:25 pm
I hope that I’m very wrong about the conclusion that I have arrived at on how all of this will end. But, almost every other day, another piece of the puzzle falls into place which only confirms my long term prognosis. That is enough to keep me up late at night.
March 4th, 2010 at 10:28 pm
My opinion:
Q2 should be better than Q1 as all the companies with cash start to announce how they will use some of it…….M&A, stock buybacks, or special dividends……..
I could be wrong about the states’ fiscal problems not making their way into the market:
I guess we could see California or some other states break down fiscally and the uncertainty cause a market correction……..Not sure if it would be caused by an actual default, a shutdown of state facilities, or some other reality…….But, it could cause a pullback since the media will start talking about how so many other states are in the same mess……etc, etc, etc……
March 4th, 2010 at 10:29 pm
Dogfish Says:
March 4th, 2010 at 10:03 pm
TakBak04,
Could you provide some links for that
=========
If you Google “Geithner must Go” on Google you get lots of articles that have been posted for months from Savvy Financial Reports… But here is the latest on “Timmeh, ” which is one more take down from the well respected Simon Johnson:
Simon Johnson
MIT Professor and co-author of 13 Bankers
Posted: March 4, 2010 02:44 PM
Disastrous Performance by Treasury on Capitol Hill
http://www.huffingtonpost.com/simon-johnson/disastrous-performance-by_b_486083.html
AND:
Stories about Rahm have been the buzz all over the Blogs this last week. This one has some links embedded in the article that are worth the read..if you have the time an energy:
The fable of Emanuel the Great
By David S. Broder
Thursday, March 4, 2010; A21
In the space of 10 days, thanks in no small part to my own newspaper, the president of the United States has been portrayed as a weakling and a chronic screw-up who is wrecking his administration despite everything that his chief of staff, Rahm Emanuel, can do to make things right.
This remarkable fiction began unfolding on Feb. 21 in the Sunday column of my friend Dana Milbank, who wrote that “Obama’s first year fell apart in large part because he didn’t follow his chief of staff’s advice on crucial matters. Arguably, Emanuel is the only person keeping Obama from becoming Jimmy Carter,” i.e., a one-term failure.
A week later, presumably the same anonymous sources persuaded Milbank to pronounce that Obama “too often plays the 98-pound weakling; he gets sand kicked in his face and responds with moot-court zingers.”
And on Tuesday, The Post led the paper with a purported news story by Jason Horowitz saying that a president with Obama’s “detached, professorial manner” needed “a political enforcer” like Emanuel to have a chance of succeeding, “because he [Emanuel] possessed a unique understanding of the legislative mind.” Unfortunately, the story said, “influential Democrats are — in unusually frank terms — blaming Obama and his closest campaign aides for not listening to Emanuel.”
It sounded, for all the world, like the kind of orchestrated leaks that often precede a forced resignation in Washington.
Except that the chief of staff doesn’t usually force the president out. When George H.W. Bush had had enough of John H. Sununu, of course it was Sununu who walked. Maybe the sources on these stories think Obama is the one who should leave
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/03/AR2010030301776_pf.html
March 4th, 2010 at 10:41 pm
The higher February sales from many retailers looks like real growth. So positive outlook for Q2, much less so by Q4. Here is what I fear:
1) Sovereign and large state/local gov’t debt defaults.
2) Fed raises short rates, yield curve flattens, financials plummet.
3) Marginal benefit of stimulus has peaked and starts to fall.
4) Inventories are built back up and manufacturing falls.
5) Small businesses wither from lack of investment capital, keeping unemployment high and innovation low.
6) Someday China’s bubble bursts and scares everyone in ways we can’t imagine.
Notice domestic politics isn’t in there. I think we generally underestimate the importance of global changes on our equity prices.
ps: I think it is fascinating that Q3′s GDP grew, but Gross Domestic Income did not (Q4 not out yet). A statistical blip, or a deeper problem in measurement that signals that our economy isn’t really growing that fast?
March 4th, 2010 at 10:52 pm
@ Cognos
–It seems like today, fear is high. But risk of event is the same. One is well-paid to take “event risk”–
Ahh.. last time I checked, the VIX was 18 and change. What say ye?
March 4th, 2010 at 10:54 pm
Geithner is in American hero for his part in saving American capitalism.
Rahm Emmanuel is a political maestro that’s just boxed the GOP on health care and financial reform.
Both finish their four year stints, and on that day in November 2012, the S&P will be higher as will the ten year bond yield.
March 4th, 2010 at 11:06 pm
Q2 will be better than Q1.
Seven months from now, the SPX will be below 1200 (my guess, anyway).
^^^^^^^^^^^^^
What can I be wrong about?
Hard to know. So many cross-currents. On the negative side, the Fed may be forced to tighten if crude oil rises too much. Then there’s the midterm election which is sure to be a significant market-moving event. There are tax increases on tap for next year, but maybe not if the R’s capture one or both Houses.
Could get a flare-up in the Middle East, especially if Obama draws down the troops too fast.
March 4th, 2010 at 11:22 pm
We are in a secular bear market.
We’ve had a bear market rally that has topped or close to it.
We see at a minimum a 50% mean reversion to SPX 908 this year.
I’d say an 85% chance we see SPX in mid 800s this year.
Unless:
The current Ponzi propagated by the US Gov’t and sell siders continues to dupe future bagholders.
The Fed continues to buy the US equity markets, which they are doing. Hey, they already own common and even a mall in Oklahoma. The Fed has bought a good size chunk of the US residential real estate market and at least $300 B of US debt.
March 4th, 2010 at 11:30 pm
Things are insane when it comes to anything financial nowadays, so the market could hit new all-time highs and it wouldn’t surprise me. OTOH, what’s left of the broader economy is being held together with duct tape and fiat dollars. An off the cuff reckoning:
Weak dollar/ZIRP
Massive deflation in some asset classes, moderate inflation in others
Unemployment
Mark to fantasy
Insolvent mega banks
Toxic assets on public and private balance sheets
No re-regulation of banking/finance/ratings/insurance industries
No investigations or indictments
RRE continues to have huge inventories, and the builders are still cranking out more (WTF? Where are they getting the money?)
CRE defaults are just starting, and will drag down local and regional banks
Eventually, the stock markets will reflect reality.
March 5th, 2010 at 1:14 am
We’re on a ledge between hyperinflation and hyperdeflation. At this point, the government controls the market. Where indices go from here depends on them.
And on decisions most of us have little knowledge of. This is where the Primary Dealers and big institutions have such an advantage over individual investors. If they were to trade on inside knowledge about a company’s business, the SEC would in theory go after them. But, they have direct access to Bernanke/Geithner and a ton of information about government capital flows. You and I are not going to see that in our Morningstar or Fool subscriptions. And without it (esp. if you work in another industry as I do), you are pretty much the patsy at the poker table.
March 5th, 2010 at 6:48 am
Well I’m still awaiting for the other gargantuan shoe to drop , sans the dead cat bounce , and that shoe has a name; *commercial real estate. If you enjoyed the ride the collapse of everything surrounding ,and feeding at the hog-trough of home real estate , you’re positively gonna swoon with delight over the concentric waves as repercussions from the epicenter of commercial real estates’ day of reckoning.
As for moi I only pick individual horses in the horse race and not entire herds and if one was smart /lucky enough to have invested substantially in gold at the $250 level and AAPL at $17 in 2002-03 before it split at around $80 and rocketeted to $200+ and *still* holding…….well one couldn’t be that wrong for 2010. ;-)
March 5th, 2010 at 6:59 am
Back up to 1150 first(2 weeks?), then down to 950 by Q3.. EOY.. who knows, maybe closer to 1000-1050 after QE is restarted with markets falling due to higher long term rates due to sovereign concerns.
March 5th, 2010 at 8:08 am
One guy I chat with from time to time at the gym who only trades from the short side kept talking about the low volume all of last year during the rally. He kept shorting and getting no results from that. After a few months of our banter I said to him “if you were waiting for volume to confirm this rally, you never got long from points around 825 on the SPY when the SPY crossed back over and held at the 100 dma.”
The reality apparently is that volume is not a good tell for the overall market direction these days. The biggest volume came in on the 110 point correction lower recently with the single biggest volume day at the low.
I note that important niche credit market indicators such as junk bonds and muni bonds continue to perform very well. These were the horrible performers back in 2007 that flashed yellow lights to the investing world, and here they are flashing green lights to my market view. Considering the nothing-but-awful headlines on the California and Illinois economic realities, that is really quite remarkable how well munis are performing here and the sign of a bull market when bad news is completely ignored.
I also view EWZ and INP as critical market indicators, and both of these have crossed back over their 50 dma’s in the last few days. The Brazilian Real is showing some nice firm price action, too.
Conclusion: I like the market here due to the above indicators. I really don’t at all believe that you can use the US economy as a proxy for your view of the US market since 60% of SP500 earnings come from international operations. Also quite noteworthy, the IWM has been the best performing major average so far y-t-d up 5%, vs 0% for the Naz, and its even just made a new 52 week high. The IWM should be the worst performing average of all if the domestic economy were poised for a sudden swoon. That’s certainly not what the message of the market is right now.
March 5th, 2010 at 8:24 am
@VennData
Sarcasm ‘on’, right?
March 5th, 2010 at 9:04 am
I might be very wrong:
…in my belief that our politicians will fail to learn anything from the financial crisis, and thus set us up for a decade of economic disaster.
March 5th, 2010 at 9:26 am
And more importantly, what might you be VERY wrong about?
My rock-solid confidence that I can get a good-paying job again.
March 5th, 2010 at 9:39 am
Queball –
VIX at 18 is not particularly low. It was below 18 for the entire 2003-2007 timeframe. It was as low as 10. Plus VIX does not really price “fear of event risk” vis-a-vis fundamental undervaluation. It prices “volatility” which is a symmetric process. (It also prices funding costs and trading liquidity.)
March 5th, 2010 at 8:34 pm
I’m still keeping a close watch on what Marc Faber says. Faber says the S&P 500 and the Dow could make new highs. S&P could hit 1150/1200 but then he expects a 20% correction.
http://foxmuldar-conservative-thinker.blogspot.com/2010/03/faber-euro-has-more-to-fall-s-could.html
Worth listening to what Faber says. I bet he has a closet full of those blue shirts. lol
March 6th, 2010 at 3:19 am
[...] the same day, we find the Big Picture asking this question: more importantly, what might you be VERY wrong [...]