According 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.
Posts Tagged ‘Expectations Indicator’
High Expectations since 9/28/09
Thursday, October 15th, 2009Expectations Indicator – Updated 5/13/09
Thursday, May 14th, 2009The theory behind the Expectations Indicator is that it is easier to exceed low expectations than high ones. For more information on the Expectations Indicator click here.
The Expectations Indicator report will be released in the following format till we decide to change it.
High Expectations – Listed by Highest to least highest expectations
1. Energy, Basic Materials, Consumer Services and Technology are tied
2. Utilities and Telecommunication
Low Expectations – Listed by Lowest to highest lowest expectations
1. Financials
2. Industrials
The following had no change in Expectations; Healthcare and Consumer Goods
Overall the market has relatively High Expectations.
Since the Expectations Indicator concept is new, only time will prove this it useful or useless. This indicator will continue to be released until proven not useful. The indicator is for information purposes only and is not meant to constitute any type of financial advice. We also do not guarantee the accuracy of the above information and at any point may alter, change the process of producing it and or discontinue it.
Expectations Indicator – Updated 5/10/09
Monday, May 11th, 2009The theory behind the Expectations Indicator is that it is easier to exceed low expectations than high ones. For more information on the Expectations Indicator click here.
| Expectations Indicator for Week of May 10th, 2009 | ||
| Sector / Index | 5/6/2009 | 5/10/2009 |
| Energy | Low Expectations | Low Expectations |
| Materials | Low Expectations | Low Expectations |
| Utilities | Low Expectations | Low Expectations |
| Healthcare | Low Expectations | Neutral Expectations |
| Industrial | Neutral Expectations | Low Expectations |
| Consumer Goods | Low Expectations | Low Expectations |
| Technology | High Expectations | Neutral Expectations |
| Financials | Low Expectations | Neutral Expectations |
| Consumer Services | High Expectations | High Expectations |
| Telecommunications | High Expectations | High Expectations |
| Real Estate | High Expectations | Neutral Expectations |
| Average Total Market | Low Expectations | Low Expectations |
| S&P 500 | Low Expectations | Low Expectations |
| Nasdaq 100 | High Expectations | High Expectations |
| Dow 30 Industrials | Low Expectations | Low Expectations |
| High Expectations | ||
| Low Expectations | ||
| Neutral Expectations | ||
In this update of the Expectations indicator the largest moves in expectations occurred in Technology going from high to neutral expectations and Consumer Services which has stayed at high expectations, but in the actual data increased rather significantly.
Healthcare has gone from low to neutral expectations maybe showing a pause. Industrial has moved from neutral to low expectations. Real Estate has moved from high to neutral expectations. From the data, it looks like the market has relatively high expectations for the retail sales report due Wednesday.
From the Expectations Indicator report it looks like the Dow 30 and S&P 500 will still look to move higher on the shoulders of basic materials, industrials, utilities and energy. The market may show weakness in the overly speculated sectors (over the past few months) in preparation for the retail sales numbers.
Corrections: On the May 6th, 2009 Expectation Indicator update had two errors due to poor data entry. Real Estate was should have been high rather than neutral expectations, financials should have been low rather than high expectations and lastly the overall market average was low not neutral expectations. Remember this is a new indicator and errors can happen. It is still in the concept stage and the process of gathering the data is new.
Since the Expectations Indicator concept is new, only time will prove this it useful or useless. This indicator will continue to be released until proven not useful. The indicator is for information purposes only and is not meant to constitute any type of financial advice. We also do not guarantee the accuracy of the above information and at any point may alter, change the process of producing it and or discontinue it.
Expectations Indicator – Updated 5/6/09
Wednesday, May 6th, 2009The theory behind the Expectations Indicator is that it is easier to exceed low expectations than high ones. For more information on the Expectations Indicator click here.
| Expectations Indicator for Week of May 3rd, 2009 | ||
| Sector / Index | 5/3/2009 | 5/6/2009 |
| Energy | Low Expectations | Low Expectations |
| Materials | Low Expectations | Low Expectations |
| Utilities | Low Expectations | Low Expectations |
| Healthcare | High Expectations | Low Expectations |
| Industrial | Low Expectations | Neutral Expectations |
| Consumer Goods | High Expectations | Low Expectations |
| Technology | High Expectations | High Expectations |
| Financials | Low Expectations | High Expectations |
| Consumer Services | High Expectations | High Expectations |
| Telecommunications | High Expectations | High Expectations |
| Real Estate | High Expectations | Neutral Expectations |
| Average Total Market | Low Expectations | Neutral Expectations |
| S&P 500 | High Expectations | Low Expectations |
| Nasdaq 100 | High Expectations | High Expectations |
| Dow 30 Industrials | Low Expectations | Low Expectations |
| High Expectations | ||
| Low Expectations | ||
| Neutral Expectations | ||
In this mid week Expectations Indicator update there has been several changes in expectations. The largest move in expectations was in financials where they went from low to high, the real data actually showed an 80% change in expectations.
Healthcare had gone from high to low expectations, actually the real data really showed that the market overall raised its expectations and Healthcare stayed the same. Industrials went from high to neutral expectations showing that that this sector possibly has topped out. Consumer goods went from high to low expectations showing the market seems to be shifting to risk adverse staples. Real estate went from low to neutral expectations, again this was a case where the expectations for real estate stayed the same but the overall market expectations where raised.
The overall market expectations where raised from low to neutral expectations. The S&P 500 went from high to low expectations caused by the lowered expectations in consumer staples and energy which are currently heavily weighted in the index.
Since the Expectations Indicator concept is new, only time will prove this it useful or useless. This indicator will be released weekly until proven not useful. Going forward we will also be using popular Indexes to measure its success from the previous week. The indicator is for information purposes only and is not meant to constitute any type of financial advice. We also do not guarantee the accuracy of the above information and at any point may alter, change the process of producing it and or discontinue it.
Expectations Indicator – As of Sunday 5/3/09.
Monday, May 4th, 2009Expectations Indicator – As of Sunday 5/3/09.
The theory behind the Expectations Indicator is that it is easier to exceed low expectations than high ones. For more information on the Expectations Indicator click here.
| Sector / Index | 5/3/2009 |
| Energy | Low Expectations |
| Materials | Low Expectations |
| Utilities | Low Expectations |
| Healthcare | High Expectations |
| Industrial | Low Expectations |
| Consumer Goods | High Expectations |
| Technology | High Expectations |
| Financials | Low Expectations |
| Consumer Services | High Expectations |
| Telecommunications | High Expectations |
| Real Estate | High Expectations |
| Dow 30 Industrial Average | Low Expectations |
Expectations seem to be lower in Industrials, Energy, Basic Materials, Utilities and Financials. I would suspect that Financials have had relatively low expectations for some time and will continue, since they appear to be the head of the beast. The Expectations indicator would appear to favor the higher yielding industries which typically show a risk adverse shift. Remember this does not constitute advice, just a liberal interpretation of an unproven (hopefully to be proven sometime in the future) indicator.
Since the Expectations Indicator concept is new, only time will prove this it useful or useless. This indicator will be released weekly until proven not useful. Going forward we will also be using popular Indexes to measure its success from the previous week. The indicator is for information purposes only and is not meant to constitute any type of financial advice. We also do not guarantee the accuracy of the above information and at any point may alter, change the process of producing it and or discontinue it.
Coming Soon!! The New Expectations Indicator
Sunday, May 3rd, 2009The market has shown investors since its inception that stocks don’t trade purely on fundamentals; they seem to trade more on expectations. Expectations are influenced by the companies and interoperated by Wall Street. Expectations on Wall Street are missed, met or exceeded.
Expectations that are missed typically have a negative impact. Expectations that are met typically have a neutral effect. Lastly expectations that are exceeded, most of the time, command a positive effect. The interesting effect of expectations is that they seem to supersede the underlying real data or action.
Imagine two children attend the same school and take exactly the same classes. One of the children is an A student and the other is a B student. On report card day both come home with straight A’s. The A student met expectations and the B student exceeded them. I will bet you the parents’ response will be more favorable for the B student who exceeded expectations, even though they got the same exact grades.
The Expectations Indicator is hopefully a way to show trending expectations for a sampling of the market and individual sectors. This indicator is not meant to give advice on market sentiment, but more of an understanding of its expectations. The expectations indicator views measureable changes in earnings expectations.
When expectations are low, typically it is easier to exceed them. If expectations are high, it is usually easier to miss them. When expectations are neutral, expectations are just as easy to miss or exceed.
The first Expectations Indicator results should be released Monday from information gathered on Friday May 1rst, 2009. Since Expectations Indicator concept is new, only time will prove this it useful or useless. This indicator will be released weekly until proven not useful. We will also be using popular Indexes to measure its success from the previous week. The indicator when released is for information purposes only and is not meant to constitute any type of financial advice.
