Maybe the fact that the majority of you guys claim we are just in the midst of a dead cat bounce... this can be seen as a bullish sign. Remember markets always bottom when things look like crap. That doesnt say much because things looked like crap on the way down too. THe point is... as the market hits its final bottom.... things wont be all of the sudden great. Do you guys expect things to start being fundementally good near the lows of the market. Once we are well in the midst of the rally off the final bottom.. things will start to appear good. --MIKE
You have a good point. I suppose that in the fall of 1932, things still looked pretty grim (despite a strong move up from the previous summer), however, in the face of that grim outlook the valuations had dropped to 5.5 times earnings. Fundamentally things were probably not improving much, but the stock market became a good value from which to launch a bull market. You can't say that in this situation. A liberal estimate of the S&P is about 25 time earnings (more conservative estimates are in the 40's). The market still hasn't reached "a good value". I guess we'll just have to wait a see if earnings recover, as the market seems to be forecasting.
I still do not believe earnings have anything to do.. with predicting stock markets. There is no such thing as "fair value." Oversold market or overbought market. There is barely any correlation between todays close and tomorrows close. Each is independent. THe truth is that the correlation is so tiny... its not tradable. It can only be realized by a tremendous sample size. The only terms I believe exist in the market... are... trending & choppy.
The bull market is back because of the way the market is going up and earnings aren't as bad as they seem. The last few year's have been spent cost cutting and getting rid of inventory and now we shall see the fruit's of there labors. The market is almost like in the 90's the stocks are starting to have huge percentage gains and that lead's to huge net change gains.
Well, bull or not I'm buying long dated puts and ratio spreads on QQQ, CSCO, SMH, AOL, JPM, IBM and FNM. I've been buying small for the last 2 weeks and will continue to do so on market rallies. Personally I think the bulls will have even fatter turkeys for xmas than they did on Thanksgiving, but then there's an awful lot that can go wrong in 2003.
If Lundy comes back, that will surely spell the end of this upswing . Unless he calls for the markets to tank - a sure sign that the bear is dead and the bull is running.
There have been more closes above 200 day moving averages last month. December tends to be up[like MSFT] but that doesn't insure a bear market ending.