S&P has topped for 2006

[Maverick74]

Quote from Rearden Metal:

I didn't know about the ISEE, Mav- so that was one of the best posts I've ever seen on ET. Thanx!

One more thing: When this 4-month old rally spike <i>does</i> end, IMO it will end with a few months of sideways action- not a U-turn selloff spike going the other way.

I agree RM. There are two types of corrections. Price corrections and time corrections. People on ET seem to forget about the time corrections but they both serve the same purpose.

It is very possible that this market experiences a time correction where we go 3 to 6 months without moving anywhere, maybe drift a little lower. This will only drive the bears more insane as they are expecting the end of the world. LOL.

Yes, that ISEE is definitely something to watch. It is far more effective then the CBOE's put to call ratio and much better then all the other sentiment indicators. It is not 100%, nothing is. But just watch it closely and you will see it is uncanny how well it calls the major highs and lows.

Good trading to you.

 

[chanster]

you're measuring this move from july with 180 handles but the bull market started in 2002 and has run 5000 pts without a 10% pullback. the vix in the 9's and just the grinding up non pullback of this run is eerie. it smells as if theres trillions of derivitatives holding this in place.techincals can only take one so far as the fundamentals are weakening daily. so you're saying the commericals who are heavily short are wrong?odd lot shorting by joe six pack is also very low.thow in iran,the mideast the collapse of the $ and you could have a big move down. but i agree till the technicals pt down you have to stay long. yes i'd call moves in goog,aapl, rimm and many other stocks very speculative. goog with 156 billion gap is mindboggling. again the fallacy of the argument of saying oh aapl's only 45 times earnings or googs only 40 is we're at or near peak earnings for the cycle.look at the home builders. if you bought them at 5 times earnings 12 months ago you're down 50%. i'm expecting a 10-15% hit early next year but time will tell

 

[Maverick74]

Quote from chanster:

you're measuring this move from july with 180 handles but the bull market started in 2002 and has run 5000 pts without a 10% pullback. the vix in the 9's and the just the grinding up non pullback of this run is eerie. it smells as if theres trillions of derivitatives holding this in place.techincals can only take one so far as the fundamentals are weakening daily. so you're saying the commericals who are heavily short are wrong?odd lot shorting by joe six pack is also very low.thow in iran,the mideast the collapse of the $ and you could have a big move down. but i agree till the technicals pt down you have to stay long. yes i'd call moves in goog,aapl, rimm and many other stocks very speculative. goog with 156 billion gap is mindboggling. again the fallacy of the argument of saying oh aapl's only 45 times earnings or googs only 40 is we're at or near peak earnings for the cycle.look at the home builders. if you bought them at 5 times earnings 12 months ago you're down 50%. i'm expecting a 10-15% hit early next year but time will tell

OK, well here is where we are in disagreement. And perhaps I am wrong, but I don't believe you measure a bull market from the lows of a move. I measure them from the new highs. Yes, the Dow has rallied 5,000 pts from the 2002 low, but that is after it dropped 4,500 pts from the 2000 high. So to me, the Dow bull has only been going here for 500 pts. Again, I could be wrong on how you should technically measure a bull market, but I think it's unfair to use to low after a serious correction. If stock XYZ is at $100 a share and it drops to $50 a share and then rallies back, I would not argue that stock is in a bull market because it has only returned to where it already once was. So we will have to agree to disagree there.

As far as using GOOG and AAPL for your argument, again, very small sample pool there. For one, AAPL and GOOG are growing like gangbusters and producing earnings that this country has never seen before. Yes, they are trading at a premium as well as they should. At some pt in the future, their earnings will peak and they will fall only to be replaced by the next GOOG and AAPL. Nothing new here as this has been going on for 100 years.

The homebuilders are also a terrible example as they cannot grow their earnings outside demand. Historically homebuilders have traded at single digit P/E's and when they got above 10, they were grossly over valued by all measures. They are in a unique class of their own.

And again, trying to bring in fundamentals is not going to work either as the market is forward looking. Sure, we have many serious problems in this economy, but that is priced in, we are looking forward now. Sure, any number of things can go wrong and when the market suspects a problem will arise in the future, it will take that into account.

Although at the current time I'm not sure which fundamentals you are referring to. We just had a blowout qtr for earnings exceeding all expectations, the bond market has no worries of inflation, interest rates are for the most part done rising, personal wealth is at an all time high in this country, wages are growing at the highest clip since 1995, and unemployment is at 5 year lows at 4.6%.

Please don't respond to me that you don't believe these numbers as I'm not making a fundamental case here. I simply don't see what fundamental problem is on the horizon other then speculation that oil is going 120$ (which is possible, not probable).

Here is a little bit of irony for you. I actually could see the mkt tanking if the economy gets too strong. Most tops in the mkt are actually formed at economic peaks, not troughs. So you are indirectly arguing for a rally, not a selloff. If everything is as bad as you say it is.

Anyway, I'm not trying to make the case for a higher or lower mkt, I'm simply trying to understand the bears argument as I am puzzled that they missed this huge rally and continue to be bearish.

I would definitely not be short this mkt on fundamentals. Technicals? Absolutely, when that happens. Hint: it's not happening now.

 

[romik]

Has anyone analysed yearly prices of turkeys? I reckon when yearly prices of turkeys start declining - the top is near. Happy Thanksgiving!

 

[doublea]

Quote from Maverick74:

OK, well here is where we are in disagreement. And perhaps I am wrong, but I don't believe you measure a bull market from the lows of a move. I measure them from the new highs. Yes, the Dow has rallied 5,000 pts from the 2002 low, but that is after it dropped 4,500 pts from the 2000 high. So to me, the Dow bull has only been going here for 500 pts. Again, I could be wrong on how you should technically measure a bull market, but I think it's unfair to use to low after a serious correction. If stock XYZ is at $100 a share and it drops to $50 a share and then rallies back, I would not argue that stock is in a bull market because it has only returned to where it already once was. So we will have to agree to disagree there.

As far as using GOOG and AAPL for your argument, again, very small sample pool there. For one, AAPL and GOOG are growing like gangbusters and producing earnings that this country has never seen before. Yes, they are trading at a premium as well as they should. At some pt in the future, their earnings will peak and they will fall only to be replaced by the next GOOG and AAPL. Nothing new here as this has been going on for 100 years.

The homebuilders are also a terrible example as they cannot grow their earnings outside demand. Historically homebuilders have traded at single digit P/E's and when they got above 10, they were grossly over valued by all measures. They are in a unique class of their own.

And again, trying to bring in fundamentals is not going to work either as the market is forward looking. Sure, we have many serious problems in this economy, but that is priced in, we are looking forward now. Sure, any number of things can go wrong and when the market suspects a problem will arise in the future, it will take that into account.

Although at the current time I'm not sure which fundamentals you are referring to. We just had a blowout qtr for earnings exceeding all expectations, the bond market has no worries of inflation, interest rates are for the most part done rising, personal wealth is at an all time high in this country, wages are growing at the highest clip since 1995, and unemployment is at 5 year lows at 4.6%.

Please don't respond to me that you don't believe these numbers as I'm not making a fundamental case here. I simply don't see what fundamental problem is on the horizon other then speculation that oil is going 120$ (which is possible, not probable).

Here is a little bit of irony for you. I actually could see the mkt tanking if the economy gets too strong. Most tops in the mkt are actually formed at economic peaks, not troughs. So you are indirectly arguing for a rally, not a selloff. If everything is as bad as you say it is.

Anyway, I'm not trying to make the case for a higher or lower mkt, I'm simply trying to understand the bears argument as I am puzzled that they missed this huge rally and continue to be bearish.

I would definitely not be short this mkt on fundamentals. Technicals? Absolutely, when that happens. Hint: it's not happening now.

Have you ever looked at the relationship between the trend in junk-bonds and the SP? I do not think the top is here yet as long as the high-yield bond funds are performing well. Sure, we might see some correction about 8-10% but nothing crazy. My target for SP is 1800. Not sure when that will happen but 3-4 years is my guess.

 

[chanster]

the last 2 months all i see is 90% of economic #'s turning down hard wether it's the ism,factory orders or many other indicators.. gdp growth of 2% is horrible but lets exclude housing even though housing is responsible for our prosperity the past 4 years. if things have been so good as you say obviously most americans haven't felt it as evidenced by the elections. i agree wealth is at an all time high but the tilting is even more to the wealthy.the gov't can say theres no inflation yet 3 of americans biggest expenditures home's ,health insurance and education have vaulted at 6-10% a year the past 6.as far as earnings growth take out the katrina effect and you have 11% growth for last qtr. after 6 years of huge options fraud from 300 or more companies who trusts earnings #'s? also i'll be very interested to see holiday sales with consumer confidence falling the last 2 months. you're correct few on this board caught alot of this 4 month run as there day traders and close positions daily so thats why you might see some negativity on this board. BUT AGAIN I AGREE NONE OF THIS MEANS ANYTHING AND WE HAVE NO IDEA WERE THE MARKET GOES AND TO DATE THE TREND IS STILL UP

 

[DeepFried]

Quote from Maverick74:

Yes, I think most of the ET bears are looking for another line of work. The posting on ET the last 2 weeks has virtually come to a halt. I would bet half this message board took a pretty big hit and close to that probably threw in the towel. I think Nitro blowing out was a big tell.

True enough but one of the big reasons posting is down is you have the same people posting 87 times per day that the market is being run up by the Bilderburg-Jew-Masonic-Halliburton conspiracy. I, for one, got tired of trying to have some kind of intelligent debate about the market with little or no success. I'm not giving up on ET but I'm less inclined to post lately.

Also, I think many if not most of the people here have no experience with the market prior to the internet bubble. That's no sin, of course, but they seem to think there was no stock market before 1998. If you're going to trade for a living, you need to be a student of the markets. That means pulling your head out of your ass and looking back further than 1998. It also means paying attention to what the market is thinking RIGHT NOW about what will happen 3 - 6 months down the road. Hint: It's not the worried about the Masons.

 

[scriabinop23]

Quote from DeepFried:

True enough but one of the big reasons posting is down is you have the same people posting 87 times per day that the market is being run up by the Bilderburg-Jew-Masonic-Halliburton conspiracy. I, for one, got tired of trying to have some kind of intelligent debate about the market with little or no success. I'm not giving up on ET but I'm less inclined to post lately.

Also, I think many if not most of the people here have no experience with the market prior to the internet bubble. That's no sin, of course, but they seem to think there was no stock market before 1998. If you're going to trade for a living, you need to be a student of the markets. That means pulling your head out of your ass and looking back further than 1998. It also means paying attention to what the market is thinking RIGHT NOW about what will happen 3 - 6 months down the road. Hint: It's not the worried about the Masons.

so many bigots on ET I can't get over it.

 

[thorn]

Quote from Rearden Metal:

I didn't know about the ISEE, Mav- so that was one of the best posts I've ever seen on ET. Thanx!

Yes, I agree with you RM. I didn't know about the ISEE either, but it sure sounds like something I want to follow going forward!

So many thanks Mav for sharing this info. You see, you hang around ET long enough and you can actually get so awesome posts. DAKT by RM during the summer was my favorite, and this ISEE post by Mav is right up there.

In response to sentiment though, the main indicator I follow is at highly bullish levels as of a week ago. this sentiment indicator has been around a long time and is widely followed so it merits strong consideration..

 

[iceman1]

hmmmm............. that's funny... here all these years i thought the market looked... ahead... not at the present or past! kinda like housing, eh--- !? who knows what happens here with the public coming on board at or near highs! maybe we bubble over!

no doubt the downside reward at this juncture seems non-existent, and few people are not bullish (as contrasted with cautious which is not like being bearish) .

the problem with shorting here is we have a seasonally strong period and many feel warm and fuzzy like they did back in 2000, more importantly many have taxable gains. The Q is do they wait to save tax or cash out sooner fearing losses of more than the $ savings in holding until 1/07. then again is tax really an issue nowadays with hedge funds et.al... like back in the 80s-90s?!

but IMO it is certain the beginning of 2007 will see a very large correction. we all tend to forget when things are rosy that markets typically fall/correct faster than they rise. La Vie En Rose/Piaf ("life in the roses/looking at life through rose-colored glasses")





IcE