Before you sell everything consider...

Quote from gnome:

11/21... Not true about Rydex Ratios... still very close to "market peak" kind of numbers.

There might be some bearish talk, but if sentiment is measured by how much money has been committed to the dark side, you'd have to conclude that the market is still complacently bullish.
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gnome,

take a look at the % of rydex sectors with assets > 50 day MA...it has fallen from over 85% in late october to 12% now. The flows into bearish funds is hitting two standard deviations from normal - very rare (tempest,ursa,venture,arktos).
 
Quote from brasiltrader:

gnome,

take a look at the % of rydex sectors with assets > 50 day MA...it has fallen from over 85% in late october to 12% now. The flows into bearish funds is hitting two standard deviations from normal - very rare (tempest,ursa,venture,arktos).
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I'm looking at the Bear Asset vs. Bull Asset Ratio, and it's only about 15% across the range, just up off of lows.
 
Quote from gnome:

I'm looking at the Bear Asset vs. Bull Asset Ratio, and it's only about 15% across the range, just up off of lows.
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I see the same gnome; I don't have them all in my favor, but the Rydex indicators I referred to have been very accurate in the past in timing bottoms (more so than tops).
 
Quote from brasiltrader:

1. The market is not overvalued (as measured by the fed model), the yield curve is not inverted, and deflation isn't on the horizon.

2. Sentiment has gotten very, very negative as measured by Rydex flows, various sentiment polls, and ISEE call/put data (all of these very representative samples). The public has been scared out of this market to a very large extent.

3. The fed will be cutting rates, regardless of all the chatter about the minutes being too hawkish.

4. The decline in the dollar has been orderly and there has never been anything that I am aware of correlating dollar weakness to bear markets.

5. It will not be different this time (sorry Cramer). Look for Resolution Trust Jr or something similar to save the US banking industry (it is what I would call too big to fail, I suppose).

I am looking for and positioned for a rally that takes the market higher into the end of the year.

Just my 2 cents.
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Agree. We will go MUUUCHHHH higher from here
 
Quote from Digs:

They say on CNBC that housing is 5% of the market NOW.

When the market was moving up in 2004 to 2006 the power behind the market was housing and employment, basically the consumer.

Housing is directly maybe 5% of the market, but the consumer is 70% of GDP and housing is 80% of consumer (say), so if consumer falls to 60% will exports pick this fall of GDP...

So housing is going, going...employment... is on the verge..

BUY STOCKS IF YOU BET THE CONSUMER WILL BE UN DAMAGED BY CURRENT WOES.

THE BIGGEST INDICATOR IS THE UN-EMPOYEMENT INSURANCE CLAIMS..

CANARY in the coal mine is Xmas 2008 retail sales...

If this spikes up ..game over...
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The attached chart is a comparison of the SPX gains or losses year to date in 2007, compared to the housing index gains or losses year to date 2007.
 

Attachments

Quote from jeffalvinson:

The attached chart is a comparison of the SPX gains or losses year to date in 2007, compared to the housing index gains or losses year to date 2007.
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You need to add a little pic of Ben Bernake in a helicopter dumping money over this chart :)

The pressure is gonna stay on the dollar, but my contention is that increasingly accommodative monetary policy and gobs of liquidity is going to save the market, at least for a trade from these levels.
 
As long as US is threatening with real dollar term GDP shrinkage. IE ( Growth - inflation = negative ) It is better to look at commodities or other market with real dollar term GDP growth.

Basically, no one wants to invest in a stagflation market. At best, you can play defense there.
 
Quote from poyayan:

As long as US is threatening with real dollar term GDP shrinkage. IE ( Growth - inflation = negative ) It is better to look at commodities or other market with real dollar term GDP growth.

Basically, no one wants to invest in a stagflation market. At best, you can play defense there.
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I can't disagree with you poyayan, but I still like em for a trade.

After we rally, and the collective mindset becomes "hey don't fight the fed", I will probably be flat US Equities. My contention is we don't crash lower from here as the current mindset is "the fed is impotent" and the vast majority of market participants have acted on that view already.
 
Quote from Digs:

They say on CNBC that housing is 5% of the market NOW.

When the market was moving up in 2004 to 2006 the power behind the market was housing and employment, basically the consumer.

Housing is directly maybe 5% of the market, but the consumer is 70% of GDP and housing is 80% of consumer (say), so if consumer falls to 60% will exports pick this fall of GDP...

So housing is going, going...employment... is on the verge..

BUY STOCKS IF YOU BET THE CONSUMER WILL BE UN DAMAGED BY CURRENT WOES.

THE BIGGEST INDICATOR IS THE UN-EMPOYEMENT INSURANCE CLAIMS..

CANARY in the coal mine is Xmas 2008 retail sales...

If this spikes up ..game over...
More...

The figure i have seen, don't recall where, is that housing/building/mortgage/ real estate and related is now more than 20% of total economy (i believe it is close to 1/4). That's up from years back and is the reason many are very concerned about the impact of a collapse in that sector and its potential for spill-over into other sectors.. So this is not something to brush off as a likely overreaction. If anything, the market has so far under-reacted to the news.
 
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