Wednesday, August 05, 2009

Chart Of the Day "Today´s Rally vs Rally 1929/1930"

For a daily dose of excellent "ANTI SPIN" i highly recommend to subsribe to the free daily update from David Rosenberg.

Wer die momentan wohl beste tagtägliche Analyse frei Haus geliefert haben möchte der sollte sich hier registrieren lassen. David Rosenberg unterscheided sich nicht erst seit seinem Wechsel von Merrill Lynch zu Gluskin Sheff wohltuend von den üblichen Verdächtigen....

H/T Clusterstock

1929 comparison

This is from another Rosenberg piece via Mish
Rosenberg also points out that the 46% rally in 101 days is unmatched dating back to 1933. I suppose the rally could continue given the 1933 rally lasted 249 days taking the stock market up 172%. However, I would not recommend playing for it.
> Be careful if you´re still long this market...... The risk/reward ratio isn´t quite "favourable" right now..... If you´re considering to short this market i agree with Jesse ( even if it is very tempting) .....

> Denke man sollte sehr vorsichtig sein wenn man noch immer long ist...... Für meinen Geschmack ist das Chance/Risikoverhältnis wenig vorteilhaft und wie ich finde stand es sogar selten schlechter als dies momentan der Fall ist ..... Für alle die mit dem Gedanken spielen short zu gehen empfehle ich den regelmäßigen Besuch der Seite von Jesse.....


More realistic stuff from Rosenberg What Growth is the S&P 500 Pricing In? via Mish including the not so unrealistic chart 3 Stages Of A Bear Market .

Passend zum unten genannten Clip der nachfolgende Link von RosenbergWhat Growth is the S&P 500 Pricing In? via Mish der einen wie ich finde nicht unwahrscheinlichen Marktverlauf ( siehe 3 Stages Of A Bear Market ) beschreibt....

Mish sums it up....
Rosenberg suggests there will be no recovery without the consumer. I suggest there will be no recovery in consumer spending, discounting of course "free money" programs like "cash for clunkers".

Of course this all depends on the definition of "recovery". At best, I think we have a "Recoveryless Recovery" before the economy slips back into a double or triple dip recession. Regardless, the stock market is priced for perfection while the odds of perfection are close to zero.
I agree.... Especially when you add charts like Zero 10 Year US Job Creation to the mix.....

Hätte es besser nicht formulieren können.....Gilt besonders dann wennn man sich folgenden Chart ( siehe Zero 10 Year US Job Creation ) vor Augen führt....

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Blogger Lionel said...

Something to digest...

Technical market strength seen in resistance to repeated bear efforts since July 18; very low recent volume attributed to stocks in strong hands ("in the hands of interests not to be frightened by professional drives"). Recent rally having been digested, market considered in good technical shape for further advance.

Market action still seen driven mostly by professionals, not much public or outside buying seen. Conservative observers still believe sustained uptrend unlikely until market breaks through previous resistance levels on good volume.

When was this observation made?

August 3, 1930

10:09 AM  
Blogger jmf said...

Moin Lionel,

THANKS :-)!Just brilliant!

Didn´t know Abby Joseph Cohen is so old...... ;-)

10:12 AM  
Blogger jmf said...

So according to Knapp the market needs more ugly marco news to roar higher..... That tells you all about the fundamentals behind this rally.....

What Might Crack This Rally?

While he doesn’t forecast it happening, Barry Knapp, U.S. portfolio strategist at Barclays Capital, says that one thing that could put brakes on the market might be — somewhat counter-intuitively — a blockbuster of a jobs report on Friday. Huh? Aren’t the markets dying for good signs from the dismal job market?

Knapp explains it like this: A much better-than-expected jobs report could spark fears that the Fed might be closer to implementing exit strategies than previously thought. That could cause a selloff in the front end of the yield curve, a ratcheting up of risk worries that could theoretically ripple further down the curve and eventually pose a drag on equities. “That’s what the market could become concerned about,” Knapp said.

10:39 PM  
Blogger jmf said...

Blurred Vision Of Lenovo

Instead, when reporting its quarterly results -- a small loss, no less -- the computer maker's chairman stressed how much work lies ahead as it shifts its focus to emerging markets and away from being a global company.

Investors seem deaf to this. They paused their own bubbly-sipping for a moment -- Lenovo's shares dropped nearly 7% early in Thursday's session -- but by day's end, it was business as usual with the stock closing up 5.2%.

That's a remarkable recovery for a stock that was already trading at close to 60 times expected earnings, three times its average over the last 10 years, according to data from StarMine.

4:12 AM  
Blogger jmf said...

Another Chart from 1929-1932

taken from

S&P Watch: Market Won't Fall Without a Fight
Smita Sadana

"Investors oscillate between a fear of losing and a fear of being left out."

5:49 AM  
Blogger jmf said...

Pragmatic Capitalist via Phil´s Favourites

Can you have a true bull market without a rising currency? The S&P 500 is up 11.5% year to date, but the dollar is down 7% 5.5% year to date. As we saw during the 2003-2007 bull the real returns of the bull market were fairly poor and turned out to be built on a foundation of horrible underlying fundamentals, most obviously represented by a plummeting dollar. As the Greenback continues to fall into the abyss you have to wonder whether it’s possible to have a real bull market with a plunging currency and whether the collapsing dollar doesn’t represent the true economic outlook….

This Graph sums it up.....

6:12 AM  
Blogger jmf said...


While a lot of attention is being focused on the S&P 500's move above 1,000, most chartists are probably focused on 1,005. As shown below, the S&P 500 failed twice to rally above this level back in October and November of last year. If the index manages to meaningfully break above 1,005, there is little in the way of resistance for the next 95 S&P 500 points.

See Chart

Wouldn´t surprise me to see that the market fails to take out the 1005 mark.....

11:40 AM  
Blogger jmf said...

Just in time....
Goldman strategist says S&P could hit 1,100 this year

"We do think the new bull market has begun," Cohen told the cable channel CNBC. "It may prove that it began in March. Clearly many people were looking for better signs on the economy, and now we're getting them."

Cohen said her bullish outlook is based on corporate profits that are in the process of recovering. She said earnings of $75 a share for the S&P 500 next year are "reasonable" and that the S&P 500 at 1,050 would put the price-to-earnings ratio at about 14.

I assume the earnings formula is excluding minor costs of doing business like interest, taxes, amortisation, stpck options, "extra items like restructiring" etc..... :-)

12:23 PM  
Anonymous eh said...

Interesting links jmf -- vielen Dank! It is crazy out there...

5:50 AM  
Blogger jmf said...

Moin Eh,

thanks. Here is another oen...

Long view: bears will hold sway

The rallies of 1932, 1975 and 1982 came when stocks were unambiguously cheap, and were still cheap after the initial 50 per cent rally. The cyclically adjusted price/earnings ratio, a multiple of average earnings over 10 years, was at extreme lows.

But in 1930, stocks never dropped to long-term fair value before rallying and were blatantly expensive by the time the rally ended. This time, prices fell a bit below their long-term average for a few months but the rally has already brought them back to look expensive.

In the critical sense of valuation, then, this rally looks nothing like 1932, 1975 or 1982. It looks a little more like 1930.

5:58 AM  
Blogger jmf said...

Post-Crash Dynamics Hussman

8:26 AM  
Anonymous Anonymous said...

Hallo, JM, es wird gesagt, die Bundesbank habe ihr (unser??) gesamtes Gold in NY gelagert (Notiz bei Solari). Ist das newsworthy order bloss ein Schulterzucken wert.

Weiterhin vielen Dank fuer Deine Infos.

1:00 PM  
Blogger jmf said...

Moin Anon,

dachte bisher immer das die Bundesbank Ihr Gold in NY, London und Paris gelagert hat.

Stimme mit Jesse überein das mangelnde Transparenz ein Problem ist.

Im Gegensatz zu vielen Goldbugs halte ich immer noch wenig von Verschwörungstheorien.

Gordon Brown's Bottom and the Sale of England's Gold

Unrelated (perhaps not) to the English gold sale is this revelation about the gold reserves of Germany at around 7:25 in the tape .

"The most fascinating thing that I learned is that all the gold 'in Germany' is in New York."

This is of particular interest because Bundesbank has repeatedly denied the rumoured gold swaps with the the US Exchange Stabilization Fund (ESF) for 1,700 tons of gold, being held at West Point, NY with the designation "custodial gold."

Has the Bundesbank, like the Bank of England, sold (or lent if you will) half of its national gold reserves?

The other side of this rumour is that Bundesbank desperately wishes a 400 ton IMF gold sale to help it recover at least some portion of the 1,700 tonnes of gold which it has lent out to the bullion banks, who subsequently sold it into the market.

Why does it matter? It matters because of the lack of transparency of various Central Banks with regard to the size and timing of their gold sales, and their impact on the markets.

Its never really the initial act that is performed; it is the subsequent cover up and dissembling that brings down careers and governments.

10:11 PM  
Blogger jmf said...

Ohne Worte......

Acht Gründe, warum es weiter aufwärts gehen könnte.

10:48 PM  
Blogger jmf said...

Nochmals ohne Worte.....

Die Börse beweist, dass die Krise bald vorbei ist

Die Börse wird damit zu einer Art Gute-Laune-Maschine.

11:20 PM  
Blogger jmf said...

Comparing the 1929 & 2009 Major Rallies

12:30 AM  
Blogger jmf said...

Now JPMorgan Sees The V-Shaped Recovery (JPM)

JPMorgan says robust growth from pent-up consumer demand will lead to a "V"-shaped bounce-back

WOW!. Sounds desperate to me.....

10:46 AM  
Blogger Unknown said...

The similarities are scary. But the situation is different.

Our 2008-2009 crash has already occurred and now the Fed and other institutions are presumed to be actively supporting the markets.

When everyone is expecting a crash, it is unlikely to happen.


11:06 PM  
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11:48 PM  

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