Market Update
I haven’t addressed the recent market action in some time. Here are some recent thoughts:
• The S&P 500 has been stuck in a range the past 3 months between 1,000-1150; The next major resistance will be at the flattish 200-day moving average of 1113.
• NYSE new highs have improved; new lows are evaporating; NYSE cumulative breadth is close to making a new all-time high;
• The percentage of US indexes above their 200-day moving average has also improved
• John Roque notes that the DJIA, Nasdaq, Dow Transports, Dow Utilities, S&P 600 and S&P 400 all have upward-sloping 200-day moving averages. He adds “In short, major downside market action usually does not occur with indexes either above/supported by upward-sloping 200-day moving averages.”
FusionIQ ‘s institutional commentary can be found here: Market Continues Oversold Rally; Seasonal Trends Hold.
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July 27th, 2010 at 12:57 pm
There’s so much on the horizon… mid-term elections, possible tax-cut expiration, end of stimulus bump, continued housing deteriorization, high unemployment, Gulf oil spill migrating around Florida, more difficult earnings comps going forwards, European credit problems, state and local budget crunches, and a looming Lindsay Lohan early release!
Christmas II just ended. I guess retailers will have Christmas displays up by November 1st this year, as they bypass the comparatively unlucrative Thanksgiving holiday.
July 27th, 2010 at 1:01 pm
This is so much more educational than political views and commentary!
July 27th, 2010 at 1:18 pm
Barton Biggs bullish at the April high. Bearish at the July low. Bullish again as of yesterday. Need I say more.
July 27th, 2010 at 1:32 pm
-I tend to be a skeptic/realist but for the first time I am not short.
-Hussie for the first time is net neutral (hedging his puts) thru’ some exposure to ATM calls.
-Bloggers have turned less negative and waiting to a pull back to join the party.
-Earnings have been really good and we have had some better than expected news from Europe that helped put a floor under the concerns of European slow down, at least in near term.
-As corporations start planning for Q4 hiring, the “powers/MM/wall-street” is not going to let market fall apart heading into September time frame at least (Then we may have a sell off or retest of the July lows if things do not improve , just ahead of Nov elections).
-I think we may have a retest of the 1065-1090 area on SPX after the jobs report/ahead of Aug op-ex/fed meeting time frame. And then a possibility of a rally into Sept time frame if things do not go down on macro front here. Bradley turn dates coincide around that time frame (it could also mean a topping out as Nenner thinks?)
JM best guess at this time (assuming no other catastrophic events caused by nature or man-made)
July 27th, 2010 at 1:52 pm
How long ago was it that the S&P was breaching 1040 and we were headed to 840 (or whatever)?
July 27th, 2010 at 2:00 pm
As your resident VIX parrot I’ll say that it is getting mighty close to complacent. We are at $23 and change now and dropped below $22 this morning. $20 – $18 is considered complacent in my books for all you newbies. We were over $30 less than a month ago so the fear gauge is cooling rapidly
July 27th, 2010 at 2:37 pm
VIX Parrot. The VIX as a measure of risk is no longer the right way to look at things. Complacency has set in as computers don’t understand human nature of risk. THE ETF’s have hoarded off the risk play. I know too many hedge funds who utilize ETF’s now to spread the risk around. They have given up on the VIX trade.
July 27th, 2010 at 2:41 pm
All of this volatility in the past 90 days should serve as yet another reminder that stock trading is not for the little guys. Owning 401k investments is not a Christmas Savings Account. One must be careful with sudden and violent shifts not only in real values, but in momentum and sentiment.
That’ll be 19.95 from each of you.
July 27th, 2010 at 3:14 pm
It’s different this time. No. Really it is.
July 27th, 2010 at 3:22 pm
Let’s revisit this at 1131.
July 27th, 2010 at 3:24 pm
gordongekko00 Says:
“Barton Biggs bullish at the April high. Bearish at the July low. Bullish again as of yesterday. Need I say more.”
T’was my thought as well, upon seeing that he had flipped back to 75% long … when I saw him on a Charlie Rose panel discussion a few months back, he was all V-shaped recovery, seeing only the charts and ignoring the housing overhang, the persistent and deep unemployment, and the capacity utilization in the deep freeze. The man is a raving loon. He may well pick up some nickels and dimes over the next month or three, but in the end, his blinders-on approach to “investing” will get him and his clients thrown under the bus.
Anyone who manages OPM ought to take some sort of Hippocratic oath, something along the lines of “First and foremost, Thou shalt not lose large chunks of the client’s money”.
July 27th, 2010 at 3:24 pm
Is John Roque talking about May 4th 2010?
July 27th, 2010 at 3:25 pm
Or maybe July 21st 2010?
July 27th, 2010 at 3:29 pm
A=1000, B=1100, C=1050, D=1150? Also, all the bear trendlines one can draw from the April high have been systematically broken. Don’t fight (or try to audit) the Fed. Chief Tomahawk, your retailers are slow; ’round here the first Christmas wares appear the same time as the Halloween candy.
July 27th, 2010 at 3:53 pm
You guys seem to LIKE Hussman but DISLIKE Biggs?
I dont really care (both seem highly mediocre) BUT… Biggs was +58% in 2009, Hussman was flat to down.
So this year (maybe) its +5% Hussman / -1% Biggs (it could be even better to Biggs, if he picked the right stocks)… Doesnt really pay right?
July 27th, 2010 at 3:54 pm
Maybe Biggs was only +30-40% in 2009… but the point is the same.
July 27th, 2010 at 4:28 pm
@curb
The VIX is a measure of another trade. We shall see soon enough if it no longer gauges market fear
July 27th, 2010 at 5:57 pm
Barton Biggs was a raving bull at the peak 2007 all through 2008. How did he do those years?
July 27th, 2010 at 6:50 pm
it is the summer rally!
July 28th, 2010 at 12:52 am
Cognos is back, the market must be in “rally mode”! Time to buy some more SDS….
July 28th, 2010 at 8:14 am
@ cognos, the all-knowing,
Yes, Biggs was up 34.6% (not 58%!) in 2009, but only after expereiencing a 39.6% drawdown since October 2007, of which you can calculate he has not recovered. Additionally he was down 4.3% in 2010 as of end of May. Since 01.Nov.2007 Biggs is down 12.9% in total till end of May 2010 (and more probably after June)
Hussman is ~flat / slightly positive over the same period with much less volatility.
So who is better now?
Besides, people do not like Hussman for his performance, but for his analysis / arguments. Not always a good analysis goes hand in hand with a good implementation strategy. So Hussman may be a good analyst and a bad trader, but it does not mean the analysis is bad.
July 28th, 2010 at 7:23 pm
We will see what happens to the markets once it’s being realized that there is a recession. The recovery meme is still intact, despite some scratches.
@cognos:
Again, you are judging Hussman’s performance by using a bear market rally, which will pass, as benchmark and you are faulting him for not achieving something, although he explicitly says that it wasn’t his market strategy to ride speculative rallies. Your argument is dishonest as always.