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 Originally Posted by winner69
The fear factor in VIX spikes 11% sounds dreadful and the end of the world ... .
That was last week .. panic over ...... VIX tumbles 11% overnight
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Ananda nice Shiller PE Ratio chart great to see a correct chart better than those with that 140+ spike eh
Can pick out the secular Bull/bear cycles easily because this is how secular cycles are determined..by annualised PE Ratios such as Shillers annualised PE (above chart) NOT by the rise and fall of the market index ...the downtrend are secular bear cycles and uptrend are secular bull cycles.
OK..Rosenburg is a guru..and this latest spike is against the Secular Bear trend and does spell a long term warning...that it must correct itself because the cycle is still a secular bear....but the way it is reported..it sounds like Rosenburg says the market is going to correct very shortly (tommorrow??) ...Not necessarly so.... secular cycles are long term phemomions and thislastest spike up will correct but may take as long as a year or two to do so ..y then the E part of the equation may be better sothe PE correction may not affect the P as much than if if it happened right now.
A couple of things to remember
Annualised PE Ratios have long term figures built in so to eliminate short term fluctuations (noise)
Notice the exceptionally high PE at year 2000 and the steepness of the drop. this will cause bungy effect will will take years to settle down...In this case the upwards recoils will continue to showing bigger than normal cyclic bull markets (as happened in 2003-2007) and this current bull in theory should better than average within the overall secular bear...but the bad news is the downside is that in theory this large fluctuation will cause a bigger cyclic bear (which what happened in 2008-09) and in theory the next cyclic bear may also be a larger than normal.
There is not evidence to suggest his cyclic bull is dead...rather the contrary.
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Hoop:
Jeremy Grantham (GMO) expects the S&P 500 to drop by 15% to 25%
David Rosenberg (Gluskin Sheff) sees markets falling by 20%
Doug Kass is looking at -5% to -12%
...no one at this stage, even Elliot Wave International awaits confirmation, is saying the current bull phase is over and we will see the continuation of the bear cycle; but personally, right now, I'd rather be a bull at SPX 500 *869/*875 than at over *1100 where the market is clearly overvalued at the tune of 20% -it just makes a lot more sense to me-
...Institutional Investors drive markets and looking at the buy/sell spread of institutional investing, they usually DO NOT SELL TODAY AND BUY TOMORROW, just because a number looks nice; the market is in correction mode at present and ONLY if the values plotted in the following table are taken out, the market is off its uptrend starting in March 09 ...until then do not be a -Silly Bull, BE A Smart Bull- for a change (generically speaking)
Kind Regards
Last edited by ananda77; 30-10-2009 at 11:16 AM.
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Ananda
I'm on the record (ST posts) as saying the TA target market correction is due at DOW10350 and the S&P500 at 1140 ..it can happen at anytime of course.. may be happening now for all that I know. I have mentioned about 10% correction for the DOW....Over history the S&P500 bull market corrections average about 10%
Bull corrections falling by 20% are very very rare...so the chances of this happening is such that I certainly won't putting my money on it as a good bet of it happening.. don't care how many Gurus are saying so.
To be a successful investor I bet on something happening with a 70+% chance of it happening. I'll leave the rare events and the long shots to the Heroes. If a rare event does happen I will know in advance as there are many pre-warning indicators I use, which gives time to exit. (DISC:- As of today I am still 87% in this market)
On the flip side this correction may not even be happening yet...there is a possibility this is just another 5% breather that these markets have been experiencing every month like clockwork (notice the upward zigzag pattern on the chart) and it may zigzag up to the 1140 correction due area...maybe later as the NZX ASX indexes overshot their market correction points recently.
Ananda quote..."but personally, right now, I'd rather be a bull at SPX 500 *869/*875 than at over *1100 where the market is clearly overvalued at the tune of 20% -it just makes a lot more sense to me-"
Strongly Disagree..makes no sense
Markets can stay overvalued for years with PE flucuations (Look at your Shiller PE chart) You are telling me not to be in the market in 1995 because it is overvalued because the Annualised PE is 25 and the average is 16 just to watch it triple by 1999. ...yeah right.
OK...just for the record it was a secular bull then (1995) and now (2009) its a secular bear so this won't happen this time...but you get my point.
hey...look at the many times an undervalued market (PE 12) loses another 50% eg Capitulation at the end of a cyclic bear during the end phase of a secular bear
Ananda if the S&P 500 is 869 at this moment and you're a bull you may lose...because we would be in another cyclic bear period and I will be mostly out of the market. For the record it is very rare for a cyclic Bull to die at 9 month old. Corrections are healthy to a cyclic bull as it extends their life span.
Why everyone recites all these rare events as something that definitely going to happen now is beyond all reasonable thinking...Yes it may happen.. so does getting hit by lightning.
Its always possible these are Noahs Ark type storm clouds but any one who say with certainty that it is happening at this moment of time are purely guessing.
Yes I am aware the very steep primary uptrend is broken...and so it must, as it was too steep to continue for long.
For anyone who is learning about the Equity Market...The primary knowledge you must learn to be able to understand the overall market behaviour is Shiller annualised PE Ratios ...everything else in life is secondary.
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Hoop:
...somehow I can not get rid of the thought that there is a contradiction in your argument; I am glad you mention this current market to be a cyclical bull within a secular bear, so there is agreement, but
...this cyclical bull has run now 63% (SPX 500) since the March Low, you are still 87% invested so you are saying that there is at least a 70% chance that this cyclical bull will run another ???% based on what Fundamental Drivers??
...let's just see what the 1981 Fundamentals looked like that eventually drove the Great Bull in 1982 and what Key Fundamentals the market has to deal with now:
...room for improvements versus room for deterioration -no kidding-
Kind Regards
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Ananda quote:..."Hoop:
...somehow I can not get rid of the thought that there is a contradiction in your argument; I am glad you mention this current market to be a cyclical bull within a secular bear, so there is agreement, but
...this cyclical bull has run now 63% (SPX 500) since the March Low, you are still 87% invested so you are saying that there is at least a 70% chance that this cyclical bull will run another ???% based on what Fundamental Drivers??
...let's just see what the 1981 Fundamentals looked like that eventually drove the Great Bull in 1982 and what Key Fundamentals the market has to deal with now:
There's no Contradiction in my post Ananda.
To save rewriting hundreds of posts again here as one post and boring everyone to death with masses of pages I think my response is best posted on the "Investing strategies and the secular bear markets" thread..so please read it and look through the previous posts by everyone on the thread and you will then see that there's no contradictions.
..Its an interesting thread and my posts alone are products of hundreds and hundreds of hours of research.
Oh..by the way.... FACT:- there is only one primary fundamental driver to a stock market and that is the rises and falls of the Annualised PE Ratio...thats it!!! nothing else ...there are secondary drivers that come close (see Minskey on my other thread post)
Sorry to say that your table of key fundamentals that drives a share market is pure fiction.
Last edited by Hoop; 30-10-2009 at 10:03 PM.
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Invetrics: Financial Insight and Market Timing Signals -data point 30 October 2009- (may adjust at Market Open)
The Technical SPX 500 Whereabouts -data point 28 October 2009-
Stocktiming: Technical Market Analysis -data point 29 October 2009-
Institutional Core Holdings
Institutional NET Buying and Selling Volume level
Long Term Trending Fed. Liquidity and Foreign Liquidity Inflows
NYSE Momentum and Strength
NYSE Down Volume
US Economic Calendar -data point 30 October 2009-
Personal Income Sep: actual 0.0% (forecast -0.2%) (consensus 0.0%) (prior 0.2%)
Personal Spending Sep: actual -0.5% (forecast -0.7%) (consensus -0.5%) (prior 1.3%)
PCE Prices Sep: actual -0.5 (forecast -0.5%) (consensus -0.5%) (prior -0.5%)
Core PCE Prices Sep: actual 0.1% (forecast 0.1%) (consensus 0.2%) (prior 0.1%)
Chicago PMI Oct: actual 54.2 (forecast 51.0) (consensus 49.0) (prior 46.1)
Mich Sentiment-Rev Oct: actual 70.6 (forecast 70.3) (consensus 70.0) (prior 69.4)
Employment Cost Index Q3: actual -0.4% (forecast 0.2%) (consensus 0.4%) (prior 0.4%)
Stock Market Day Trader update -data point 30 October 2009-
...the SPX 500 broke down from the short term wedge between *1042/*1066 today and is heading lower to test the October 2nd Low *1020; decliners outpaced advancers by 5(+) : 1 and uptick buying power just about was non-existent making a positive showing once during the past trading session
...there is good potential for another oversold bounce of the October 2nd Low towards *1066/*1073 but the upside will most likely be met with an aggressive sell-off
...watch out for the PayRolls, as this data could be the trigger for the selling event which could accelarate losses toward the Jun High *956 initially, with potential to retest the Jul Low *869 before year-end
Market Commentary -data point 30 October 2009-
Long Term: THE BEAR
_no guarantees and trading strategies are just ideas_
Kind Regards
Last edited by ananda77; 31-10-2009 at 09:43 AM.
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Originally Posted by Hoop
Sorry to say that your table of key fundamentals that drives a share market is pure fiction.
Hoop:
...do Really appreciate the issues you write and know a lot about, but Mr.Hoop, to me you sound like an academic who is stuck head over heels in a theoretical loop;
what you describe as primary drivers of a bull market is no more or less a consequence of market pundits, be they individual or institutional, tossing around their CASH;
...and that (CASH AND THE WILLINGNESS OF PEOPLE TO PART WITH IT) is what people should look at first as the most important determinant of a market situation
...as for the contradiction thing, I was referring to the fact that you are 87% invested at present, so logically you ARE saying, you are 70% sure this current cyclical bull will continue to run, despite severe potential restrictions facing the most universal driver for ANYTHING to go ahead and that is CASH (like: potentially higher interest rates, higher taxes; dwindling demand, over-indebted households etc,etc,)
...after today's trading session, the wave 3 down has further found fertile soil to grow and unlike the intermediate wave 3 down in 2008, this wave 3 down will be of primary degree within the -as you agreeably call it- a very healthy and alive secular bear market
Midnight Candles http://www.pimco.com/LeftNav/Feature...s+November.htm
William H Gross (Pimco -managing director-): What you see in the bond market is often what you get. Broadening the concept to the U.S. bond market as a whole (mortgages + investment grade corporates), the total bond market yields only 3.5%. To get more than that, high yield, distressed mortgages, and stocks beckon the investor increasingly beguiled by hopes of a V-shaped recovery and “old normal” market standards. Not likely, and the risks outweigh the rewards at this point. Investors must recognize that if assets appreciate with nominal GDP, a 4–5% return is about all they can expect even with abnormally low policy rates. Rage, rage, against this conclusion if you wish, but the six-month rally in risk assets – while still continuously supported by Fed and Treasury policymakers – is likely at its pinnacle. Out, out, brief candle.
Kind Regards
Last edited by ananda77; 31-10-2009 at 10:33 PM.
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Last 2 nights trading signals
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Institutional Core Holdings...still in a technical up trend
Institutional NET Buying and Selling Volume level
Long Term Trending Fed. Liquidity and Foreign Liquidity Inflows
NYSE Momentum and Strength
NYSE Down Volume
...the S&P 500 on a normalized 10-year basis is 20x and the long-turn norm is 16x. Just to go back to the norm, let alone compress to a level commensurate with an unusually high level of economic and financial uncertainty, would suggest that we would see the S&P correct down towards 875.
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