After the bears celebrated an early Thanksgiving last week, the bulls got the upper hand this week by reversing some of the losses via a 4-day rally.
Even though the volume was light, it was an up move nevertheless. Amazingly, yesterday’s gains came in the face of bad economic news ranging from weak durable goods orders and the worst new-home sales report since 1991.
While the past 4 days helped those still invested to recoup some of their losses, the S&P; 500 is still down 8.4% for the month. If I were still exposed to the market, I’d take this opportunity to unload my holdings before the next leg down starts.
This bear market is far from being over in my opinion, although strong rebounds can cloud that picture and lure unsuspecting investors back into an invested position. While I am not sure if this is a structural bear market, take a look at the video below, which features technical analyst Louise Yamada:
[youtube=http://www.youtube.com/watch?v=M2HIM3HFXXI] Contact Ulli
Comments 6
Currently 100% in CD’s and cash following your model. While searching for a Treasury ETF I found TIP that yields 8% Any comments you may have would be appreciated. That 8% sure looks better than 2% – I realize the price fluctuates but it is at near historical lows. Thanks and I will follow your guidance. Your advice has totally protected my funds – not one penny lost. Thank you and kindest regards. Paul
Paul,
The 8% yield was more than offset by a greater price drop, which makes no sense to me. A 2% gain looks a lot better than 8%, when that one is accompanied by a capital loss.
Ulli…
Is it appropriate to suggest that we're in a bear market that began in 2000 and the '03-'07 uptrend was just a bear market rally?
I don't think so due to the fact that the S&P; set new all-time highs in October last year. Once an index sets new highs doesn't that confirm a bull market? And wouldn't you then have to start from scratch when defining the next bear market?
I don't understand why Louise suggested we've been in a bear since 2000. Had the S&P; not breached previous highs then I would concur, but not given the actual numbers.
G.H.
GH,
Many people have different views on what a bear market actually is, which is why you hear the varying opinions as to whether we are in a new one, or whether this is the continuation of an old one, which was only interrupted by a bullish period.
Personally, I like to keep it simple and define a bear market as the period that my Trend Tracking Indexes are positioned below their long-term trend lines.
Ulli…
By any definition, the NASDAQ has been in a bear since 2000.
CNBC seems to think that a bear market is defined by any index that falls 20% or more off its highs. But then again, CNBC thinks a recession is strictly limited to two consecutive quarters of negative GDP. So, I do not ascribe to their definition of anything as I believe they define according to what is most convenient to their goals at any given moment.
My personal definition of a bear lies on the esoteric side:
It is any market behavior that cannot be described as a bull market.
I feel this definition works for two reasons: 1.) During market declines such as we are experiencing today everyone agrees on the lack of a bull, and 2.) Sideways movement, while not traditionally considered bear market trend, is essentially zero return + dividend income. But as you yourself have eluded to often, why be invested just for the sake of dividend return when the investor can lose principle. Also, money market is a thin uptrend during flat market movement.
G.H.
Louise Yamada correctly grasps an
event not unlike Great Depression
is unfolding. She is in agreement
with a compleatly different take on
the economy from Solar Scientists-
1993 discovery of Solar Mortality
Theory correctly predicted 2007.5
onset of socio-economic upheaval
would occur, an event not unlike
Civil War & Great Depression both
defined in Modern History by the
1796 discovery of Smallpox Cure &
Vitamin Deficiency that began sun-
synchronized, exponential human
population growth whereupon the
arrival of a 4th generation, an
economic crises occurs to support
both the aged & newborns while
1st generation trys to retire, a
triple whammy that "sinks ships"
Occurs every 3 generations, every
3 solar cycles like CLOCKWORK-
Decades are 1860s,1930s & NOW.
Bosnian death records offer CLUE
that WWII caused a phase shift of
one solar reversal 11.1yrs, so
instead of 66.6yrs, add 77.7yrs to
1929.8 stk mkt crash to get 2007.5
Did it happen?Yes 1st bank failure
Thats close enough for me to think
we ain't seen nothing yet. Anyone
who thinks this is just a short
recession hasn't got a CLUE to
whats coming, as history repeats
Note- For overview of a forest,
you have to get out of the trees.
And have to remember the purpose
of money is a way to keep score.
Roger Carmichael, BSME-optics