Thursday, May 7, 2009

Nine And Half Weeks... Later (From Zero Hedge)

David Rosenberg (one of the few that has spoken the truth thru this whole debacle) gives his views on the near and not so distant future.

A few excerpts-

"While it may be the case that the pace of economic decline is no longer as negative as it was at the peak of the post-Lehman credit contraction, the reality is that employment, output, organic personal income and retail sales are still in a fundamental downtrend."

"That leaves us with the opinion, as tenuous as it seems in the face of this market melt-up, that this is indeed a bear market rally and one that may well have run its course."

and

"Keep in mind that the jury is still out as to whether the March 2009 lows were in fact the bottom, as was the case in 1932."

Click on title for link to story. Tyler does a great job at Zero Hedge. I suggest you put him in your favorites if he's not already.
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3 comments:

  1. Thanks, Shanky.

    Few week long lurker, first time poster. I had only been to Zero Hedge one other time and had forgotten about it. Great post over there, very glad you pointed it out. I did some follow up on Rosenberg as I wasn't familiar, and he predicted 666 (before lowering it to 600 for hitting it too quickly, whoops). Crazy either way.

    You do good work over here - I watch you, Daneric, and Kenny whenever I have time to surf

    -Brian

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  2. Many want this to be either 1938 or 2003, nearing the end of the respective bear markets.

    It's normal to want the worst to be over in our quest to be happy and to not suffer more wealth destruction. Like Zero Hedge, I think thi was just a hope rally and we will soon set new lows.

    Here's my view as posted on Stocktock:
    =====================================

    This is not 2003. Back then the bottom had been tested 4 times in 6 months on the monthly chart allowing positive divergence to form on the monthly MACD which was the needed set-up to begin a sustained climb out.

    Based on the monthly MACD signature today, we are more likely about where the market was in May 2001 after the spring rally and a stretch to reach for 200dma , where it also fell short of like it is now.

    If this TA view is correct, we will continue the downtrend through the summer (sell in May) and eventually break to new lows. In 2001 this happened in September. Since the current decline is steeper it likely will happen more quickly.

    The cycle then repeated several times more and the Sept 2001 low was broken again in the summer of 2002, and then broken again in the fall 2002, and eventually set a higher low in 2003. We have this to look forward to in 2010 imo.

    Bear markets bottom when the PE and the Div yeilds are “close” and in the range of 6-9. Right now dividend yield is 3.1% and the PE is 54. No, it won’t be different this time.

    Don’t believe Wall Street or the media. They have conspired to make you feel good in the process of transferring your wealth to them.

    S135

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  3. Brian, as a former Merrill FA I he is one of the few from that camp that I respected and stayed up with after i left. BAC is losing a great one there. Guess he does not fit the "mold" of govt suck up, lie and manipulate the market group and is most likely being forced out. Thanks for the visit and comment.

    S135 - Points well taken. In no way do i prescribe to the "that happened so this will happen" scene. One difference already can be seen in the action of the weekly MACD and RSI. They held their down trend lines thru the whole cycle where this time they are busting the hell out of them here. This market manipulation and belief of Hope and Change has already destroyed the similarities, not to mention that this is a financial crisis not just a bubble burst from super elevated tech PE's. I'm patiently waiting for the Weekly indicators to top out (hopefully they don't embed as well). STO and ROC are almost there. I'm still of the opinion that the only thing that can halt this manipulated market is some sort of external factor. Maybe the Pakistan thing or something out of China will drive the market down. I'm also not going to hold my breath about any serious pullback off of 943. 38 to 50% retrace may be it. Just to manipulated and they have to keep prices up.

    Thanks for the visit and the comment.

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