Massive market surge coming.

All this talk eerily reminds me of 1999 when the Nasdaq was at 3000 and the pundits were predicting it to go much higher because of Greenspan's Y2K mini-stimulus. It briefly went to 5000 and the rest is history. Better put your hands on your back pocket, because you never know..............history does repeat, especially with those paragons of integrity on Wall St.

 

These references to 1999 and a giant short squeeze coming are just as misplaced as those 1987 "rising wedge leading up to a huge one-day crash" comparisons that now make the rounds on the blogs IMO.

History is a guide to what CAN possibly happen but a bad tool for predicting what WILL happen, especially when trying to pinpoint the exact timing.

 

Perhaps. No one knows. Two correlations: valuations stretched although not as bad as 1999. Money pump from Greenspan, which is dwarfed by the 2009 stimulus with more to come. Dangerous.

 

heres a good one. laszlo birinyi the load mouth calling for 1750 on the s@p in the coming 2 years. HERE'S HIS BOTTOM CALL IN DEC 2008 THAT THE S@P WOULD NEVER SEE 750 AGAIN( IT CRASHED TO 650 IN MARCH 2009 AND HIS CALL FOR STOCKS TO CORRECT 5-10% IN APRIL AND MAY. THE DUDES BEEN DEAD WRONG YET MAKES MILLIONS. LISTEN TO NO ONE THEY'RE ALL SALESMAN


Birinyi: Stock Market Has Bottomed

Thursday, December 4, 2008 10:06 AM

By: Dan Weil Article Font Size



Stock market guru Laszlo Birinyi, president of Birinyi Associates, sees light at the end of the tunnel for stocks.


First, he says, the market has risen in five of the last seven sessions, despite continued negative news on the economic and corporate earnings fronts, he said in an interview with Bloomberg.


“We’re seeing several characteristics of a bottoming in the market,” Birinyi says.


“For example, the heaviest declines in bear markets come at the very end. In the last quartile of this bear market,” stocks registered 60 percent of their total declines, he points out.


The Standard & Poor’s 500 stock index has dropped 54 percent to 841.38 from its record high of Oct. 9, 2007.


“Volatility is high at the end of a bear market. We think the market has made a bottom,” Birinyi explains.


“That’s not to suggest that the market will run away from us, but at this point, we should be looking forward, not back. While the market may stumble and fumble, I don’t think we’re going back to 750 on the S&P 500.”


And what stocks should investors look to buy?


“Historically, large caps do well out of bear markets, because they can put a lot of money to work,” Birinyi says.


Birinyi isn’t the only one seeing bottom for stocks.


“You have companies reaching a point where their shares really can’t go any lower,” Neil Hennessy, president of Hennessy Funds, told The Wall Street Journal.


U.S. Stocks May Drop After Rally, Laszlo Birinyi Says (Update1)

By Eric Martin and Betty Liu

April 13 (Bloomberg) -- U.S. stocks rose too far, too fast and will retreat before advancing again, according to Laszlo Birinyi, president of Birinyi Associates Inc.

“Buying stocks is like crossing Fifth Avenue when the light is red,” Birinyi said in an interview with Bloomberg Television from Westport, Connecticut. “You might make it, but the odds are not with you.”

Birinyi said the stock market is “overbought” and may fall 5 to 10 percent before rebouunding. Investors should wait for banks’ first-quarter earnings and the results of stress tests before buying them, he added. The Standard & Poor’s 500 Index added 1.7 percent last week, capping its steepest 23-day advance since 1933, after Wells Fargo & Co. reported higher- than-estimated profit.

 

This market is all about a G20 monetary pump. But the stimulus on this side of the pond is ending from the fed. The fed has 3 billion left on treasury purchases.

The last 2 weeks in the equity markets were purely divergence due to the banks pumping and dumping. Get ready, the S$P will be below 900 by the end of the year.

Hedge funds, banks, mutual funds, and retail traders have been piling in at the top. If you look at a lot of breadth statistics this last run up is on air alone.

There will be a 4-5% sell off in one day very soon.

The dollar weakness can only carry equities so far. Look at the divergence in the LQD. Corporate bonds are not confirming higher prices.

 

Air is lifting this market, however, I do not see any pull back in the near future as long as the dollar continues to get hammered.

Oil, Gold and the Markets are rallying together...while the Volume in the INDU is very light.

Ask any options trader what he is doing...., at least the smart ones, they are going long the vix. Why? because panic to the upside will force the Money Managers to start putting in cash..and they will hedge any "Crash" or down move by going long the VIX.

 

Which breadth stats? Last time I looked about 3 weeks ago I couldn't see it, but things may well have changed.