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).
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.
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).
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.
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.
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.
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.