Over the 3rd quarter US Government officials and the majority of the Wall Street community had declared an end to the recession. Consumer expectations where the driving force behind Consumer Sentiment numbers. So is it any surprise that earnings for the 3rd quarter are showing some signs of life. Earnings are a reflection of the past. The real questions is whether the 4th quarter and 2010 can live up to the lofty expectations of Wall Street for the “V” shape recovery in the face of extremely high unemployment and conservative consumer spending. Eventually the facts have to live up to the predictions or the market will fall and 6500 on the DOW will look like a gift.
Posts Tagged ‘bear’
Earnings – Where is the Surprise?
Thursday, October 22nd, 2009High Expectations since 9/28/09
Thursday, October 15th, 2009According to an indicator created by myself, expectation are high. When expectations are high, the market tends to focus on the negative. Typically this means that the market has a bearish overtone.
Contrarian to Mainstream in Weeks – Stock Market
Friday, March 27th, 2009Several weeks ago when the US Stock market was selling off with no bottom in sight we heard much of the financial populous using the term “capitulation”. Capitulation is defined by Webster’s dictionary as “surrendering or giving up”, traders characterize it as panic selling typically accompanied by large volume. Many professionals look at capitulation as a way to capitalize on another’s emotional bad decision. If the masses, “mob”, sells out then the market would have nowhere to go but up because all the sellers are gone. The theory is that it pays to contrarian.
Interesting how we really never did get this day of reckoning or “capitulation”. Instead a steady flow of relatively good news has spurred the major average up near 20% in a matter of weeks. With several weeks on a roll we have heard (not from all, but a large majority) from public officials, investment professionals and financial press that we may have seen the worst of this economic crisis.
If it pays to be contrarian then don’t you lose if you are part of the mainstream? Could the market be doing the same as capitulation but on the upside, panic buying for their jobs? Remember Wall Street suffers long term in a bear market.
President Herbert Hoover (31rst President of USA 1929-1933) on May 1, 1930 stated that United States was not through all its difficulties but he believed that United States had been through the worst (taken from The World in Depression 1929-1939 by Charles P. Kindleberger)
Red Circle Indicates End of April Beginning May 1930 Dow Industrial Average
Recent Market Action, Bullish or Bearish? …. Manipulation?
Thursday, March 19th, 2009So over the past week and a half we have been told by so many so called experts that this could be the bottom. With a few pieces of well placed news and some somewhat better than expected economic data (depending on your interpretation) and off we go to the races. We are being led to believe that the storm is leaving and the rainbow is just over the hill with the greener grass and the pot of gold.
Here is an interesting video of a well know “retired” Hedge fund manager, who explains how Hedge funds can make their own market action:
So are the actions over the last week in a half real or just a large coordinated effort? It really would not have taken much to get those dominos going at that point.
