Bullish or Bearish for 2007 (equities)

[scriabinop23]

Lets keep it simple and concise (2-3 paragraphs each). Post to the poll, and post your reasons and caveats for bullishness and bearishness on US and international equity markets.

I'll start:

1) Bullish US equities - good economic reports, SOLID jobs (most important, as it relates to housing market support), cheaper commodities w/ inflation under control. Most importantly, valuations to this bull market ARE under control. Nothing like tech bubble enthusiasm of 99 (although I might not be able to say the same thing about China). Just like last year, I think three main risks exist:

a) housing market - much worse than expected, causes chain reaction of fnma/etc bond holder market collapse (from ARM resets defaulting), halt of construction, stop of consumer spending, and massive job losses.
b) geopolitical/oil/inflation risk. if hurricanes occur and Iran pulls a fast one on the oil markets sending oil to $100+, could threaten immensely.
c) earnings take a dump.

So I'm calling for great 1st half 07 ... the rest is a crapshoot. 3 statistical notes to watch for (c/o trader's almanac) that interest me:

a) pre election years lately have always been bullish lately.
b) january is the market's strongest month.
c) first 5 days of market action predict year's outcome with something like 87% success for last century !!!

2) International markets - neutral to bullish (especially markets that have overheated) ...

 

[rateesquad]

If the amount of acquisitions and mergers is going to go up or remain in high numbers......I know that the stock market will go up.

PS the falling dollar will also help the earnings. .....that means stocks go.........yes you are correct.

 

[JamesVU2000]

Its going to be interesting to see if FCBs back off from treasury and agencies with yields so low. Rising yields could pressure the market like early last year. I wonder if the ten year could make a quick move to 5.20

 

[scriabinop23]

Quote from JamesVU2000:

Its going to be interesting to see if FCBs back off from treasury and agencies with yields so low. Rising yields could pressure the market like early last year. I wonder if the ten year could make a quick move to 5.20

buy bond puts, short the dollar, short housing, long the market, etc etc

 

[S2007S]

BUY 5 62.50%
SELL 2 25.00%
FLAT 1 12.50%
Total: 8 votes 100%


if the market was down 16% on the year it would look like this:

BUY 2
SELL 5

 

[S2007S]

Quote from scriabinop23:[/i



a) pre election years lately have always been bullish lately.
b) january is the market's strongest month.
c) first 5 days of market action predict year's outcome with something like 87% success for last century !!!

2) International markets - neutral to bullish (especially markets that have overheated) ... [/B]

International markets have been so bullish that if you called for a 10-20% drop by end of 2007 people would think your crazy.


b) january is the market's strongest month.
Usually Sept and Oct are the weakest and everyone knows what happened in 2006.

 

[scriabinop23]

Quote from S2007S:

International markets have been so bullish that if you called for a 10-20% drop by end of 2007 people would think your crazy.


b) january is the market's strongest month.
Usually Sept and Oct are the weakest and everyone knows what happened in 2006.

i agree ...

but the consensus here isn't overly bullish, yet, at least.