The Crumbliest Flakiest Stocks Bull Market Never Tasted Before

from this: The Crumbliest Flakiest Stocks

Bull Market Never Tasted Before

particularly a chart of the Dow from the 1930's for EVEN IF it repeats it will be pure coincidence, as there CANNOT BE ANY ECHO from the events of that time into Today's Market !

so correct me if I get your thinking wrong but what you're saying here is human nature today is nothing like what it was in the 1930? ...even though our debt ratio is even worse now than then?

I'd like to remind you that most Americans are flat broke without the house ATM. I do not know one person NOT ONE, that didn't use the house ATM to support their NORMAL LIVING EXPENSES.

the market can go up all it wants, I'll play that for all it's worth but the longer it goes up the bigger the correction will be and I KNOW that cause, and to repeat....MOST AMERICANS ARE FLAT BROKE...spending is not coming back without massive new borrowings....but to be paid back by how?

just sayin.

DRJB out

p.s. and never mind the hundreds of trillions of derivatives, the fact that they changed the accounting rules to make banks profitable AND (last I checked) $5 trillion in off balance sheet level III assets still awaiting mark to market....or will they delay that again another year to keep this market in a bull....(bullshit if you ask me but what hell, the trend is your friend). damn, when you start listing all the head winds in this market it sure makes the head spin......

Hi

You confirm my point of view, that recent events are far more important than transposing the current dow chart over that of the 1930's.

Look the further you deviate from the present then the more likely you are be wrong, i.e. greater probability of failure, those that obsess over the 1930's Dow chart as though its caste in stone are setting themselves up for a MEGA failure !

I am taking the bull market one swing at a time, looking for relative strength or weakness AGAINST projected patterns to determine where it will go next, the future is unwritten and to imply because events 80 years resulted in x,y,z means the same today is WRONG. better to focus on where we are heading in the present than where we went in the past.

Best

Nadeem Walayat,

Editor, The Market Oracle (http://www.marketoracle.co.uk)

THOSE WHO IGNORE THE LESSONS OF THE PAST ARE DOOMED TO REPEAT THEM.

oops sorry for the caps.

just a quick reminder though, the isn't the 2nd debt collapse and the 1930's wasn't the first so......

I'm trying to get people to understand is that the market of the last ~25 years is fuggin over it's the demographics baby and all those boomers will be net sellers NOT buyers.

as a quick example I'd say 75% of the boomers i know in socal have on average 3 houses and just looking for the opertunity to sell them (to bad they did't take my advice in 05-06).....AND a full 50% of my younger friends are either still living at home or just waiting for the day they get the inheritance.

as long as you are saying the stock market can go up with a continued collapse in demand and the boomers unloading houses and equities than i guess my math is all messed up.

oh well,

DRJB out

p.s. this is the best bull market $13 trillion in new debt could buy!

>over it's the demographics baby and all those boomers will >be net sellers NOT buyers.

See yuor making a mega assumption and setting yourself up for a big fall!

THE FUTURE IS UNWRITTEN - By latching onto the above you are MAKING A BIG ERROR ! AS THE BOOMERS MAY OR MAY NOT SIGNIFICANTLY IMPACT ON THE MARKETS. To take it as caste in stone is a mistake you do not want to make !

Remember 1987 ? the final fifth ! IT WAS AN ABSOLUTE EVENT !!!! Then along came the greatest bull market of all time, leaving the perma bears like precther behind.

AGAIN THE FUTURE IS UNWRITTEN !

The market CAN GO UP, because it discounts MORE than demographics! There are events / data that ONLY becomes apparent in hindesight, therefore watch the price rather than theories about why something should happen

Best.

Nadeem Walayat,

Editor, The Market Oracle (http://www.marketoracle.co.uk)

Nadeem

I would be interested in why you ignored the MACD divergence above ?

James.

Hi James

Because I trade the index and not the indicator, therefore my eye is always foremost on the price chart rather than on an indicator or a theory.

NW

Nadeem. Great contrarian thinking and insights you are presenting here. I very much appreciate your viewpoints. In my opinion, a final panic selloff next week to 1005-1010 S&P to reload the bears and with their shorts and then a run up into earnings season which should give us a nice short covering / combined with panic buying (the train is leaving the station) by managed account money should provide the proper sentiment for a short term top (1120 - 1140 S&P) that will then provide the proper bullish sentiment to power a 20% Correction to 940-920 S&P level setting up the next great buying opp. Thanks again for sharing your thoughts and insights.

Nadeem. Great contrarian thinking and insights you are presenting here. I very much appreciate your viewpoints. In my opinion, a final panic selloff next week to 1005-1010 S&P to reload the bears and with their shorts and then a run up into earnings season which should give us a nice short covering / combined with panic buying (the train is leaving the station) by managed account money should provide the proper sentiment for a short term top (1120 - 1140 S&P) that will then provide the proper bullish sentiment to power a 20% Correction to 940-920 S&P level setting up the next great buying opp. Thanks again for sharing your thoughts and insights.

Though don't forget that we are in a stocks bull market. So when I do analysis and arrive at and conclusion I have to skew my analysis in the favour of the bull market,

Hi Nadeem,

At this junction from your charts, can i confirm that we are on the 3 elliot waves which are coming down? If so would this have a large positive impact on the USdollar burning all the carry trades? Could the earnings season be pushing down the prices? And when you mentioned you skew in favour of the bull market with your analysis, therefore what you are saying is that the 9750 to 10000 is pretty optimistic for a top?

Appreciate your enlightenment here...

Courtesy of stockcharts.com

Dow / FTSE Targets

The trend remains inline with expectations for Dow / FTSE to experience a serious correction during October and therefore should continue to trade inside the down trend channel all the way towards the targets of FTSE 4,650 and Dow 9000, with now clearly determinable re-entry levels as well as much tighter stops.

Reasons for the rally ?

People are always interested in reasons for why markets must move in this or that direction, I have long since come to realise that the reasons are not important as the reasons only become clear in hind site AFTER the market has moved, Back in mid March the reason for stocks to keep falling were centred around falling corporate earnings expectations, as illustrated by John Mauldin's - Reality Bites :

Year-to-date through February 27, the S&P 500 was down 18.62 percent and the Dow Jones Industrial Average was down 19.52 percent. Moreover, strategists and investors are increasingly coming around to the conclusion that corporate earnings are going to be nothing short of horrendous this year and that stocks are headed even lower, as HCM has been arguing for months (without pleasure, we hasten to add). Very recently, three of the smartest forecasters on Wall Street sharply lowered their earnings forecasts for the S&P 500.

Which I said to ignore as the bear market had by then built up overwhelming bearish 'reasons' to reinforce the expectation of much lower prices, however all of this was irrelevant as it was OLD NEWS.

For more on what to do and not to do at market bottoms see - Stealth Bull Market Follows Stocks Bear Market Bottom at Dow 6,470

However, some of the reasons I gave back in mid March as to why stocks should rally have now AFTER the rally has occurred are put forward as an explanation.

A. The markets move ahead of the economy, whilst I don't profess to know the EXACT reasons of why they will move AHEAD until that becomes apparent AFTER the market has already moved, however I do have some reasoning in that INFLATION, Zero Interest Rates (Forcing savers / financial institutions to take risks) Quantitative Easing (money printing), and HUGE Fiscal stimulus packages that are laying all of the ground work for the next bubble regardless of how bad things appear as any outcome that prevents another Great Depression will be seen as bullish! i.e. even a low growth high inflation stagflationary environment WILL be seen as a positive outcome against the present day data that points to a collapse of global demand on a scale not seen since the Great Depression. The governments HAVE learned the lessons from the Great Depression and WILL succeed in inflating the asset prices and ignite the next perhaps even bigger bubble, meanwhile the stealth bull market will continue which by the time everyone realizes what's going on stocks will already by up by perhaps more than 50% from the low.

U.S. Dollar Bears Running Out of Time?

Despite the over whelming weight of bearish fundamentals that the dollar collapse proponents are eager to remind readers across the media, however one fact may have escaped this onslaught and that is the U.S. Dollar is NOT falling, the trend remains in line with my U.S. Dollar bull market analysis of Mid August 2009, that concluded that the U.S. Dollar targets a rally to USD 90 by the end of this year on the proviso that 75 is not breached on the downside which would negate the scenario. To date the Dollar has held support and continues to build a base, however at 77.25 the dollar is seriously lacking upside momentum so all is not 'yet' lost of the dollar crash proponents, despite the fact that we have listened to the same expectations for the past 18 months since the U.S. Dollar bottomed in March 2008, given the weak state of the current rally they may finally be proved right!

Today's Market Lesson - Do not THINK too MUCH !, Don't get lost in reasons of why the market must move, rather focus on what the market is doing on the price charts! AS you are trading the PRICE CHART and NOT the fundamental DATA! They can and DO move in OPPOSITE DIRECTIONS! Funnymentals are a RED HERRING that continue to sucker both the professionals and the inexperienced, whereas they should amount to no more than 10% to 20% of the your decision making process when trading rather than the over inflated 80% or more that many weight towards in depth Funnymentals studies into for instance corporate earnings forecasts.

Your swing trading analyst not too interested in what the funnymentals suggest.

By Nadeem Walayat
http://www.marketoracle.co.uk

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Nadeem Walayat has over 20 years experience of trading derivatives, portfolio management and analysing the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem's forward looking analysis specialises on the housing market and interest rates. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 300 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.