Friday, August 28, 2009

Depression-Era Bear Market Rallies Dow 1929-1932 vs 2009

A fascinating market........ With bullish sentiment among newsletter writers at its highest levels since January 2008. & Merrill Lynch Global Fund Manager Survey with highest equity allocation since October 2007 & long time bears capitulating ( see here & here ), short sellers "fleeing" , highest insider selling since 2004 with a sell/buy ratio of 61.8 , "Panic Buying" :-)!!! & zombie stocks making up to 30-40% ( swine flu ? ;-) & "Robotrading" well over 50% of the daily trading volume & rampant "creative accounting" ( see here, here, here & here) i´m more bearish than ever and i´m having 2007 flashback´s ;-) on a daily basis .....But as long everything is "better than expected" , the "less bad is good mantra" is dominating , the "Herd Mentality" is on steroids & leveraged loans are once again flying high i will repeat what i´ve said earlier .....
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) .....
Bin jeden Tag auf neue fasziniert was an den Märkten bzw. im Kasino so abgeht...... Momentan haben wir eine geradezu euphorische Investorengemeinde ( siehe bullish sentiment among newsletter writers is at its highest levels since January 2008. sowie Merrill Lynch Global Fund Manager Survey mit höchster Aktienquote seit Oktober 2007 ), Bären die einer nach dem anderen kapitulieren ( siehe hier & hier ), "flüchtende" Short Seller,höchste Insiderverkäufe seit 2004 mit einem unfassbaren sell/buy ratio von 61.8 , "Kaufpanik" :-)!!!!, hyperinflationäre "kreative Bilanzierung" ( siehe hier , hier, hier & hier), jede Meldung egal wie "grottig" "besser als erwartet" ist bzw. das "The Less Bad Is Good Mantra" ausreicht aus um die Kurse zu beflügeln und selbst waghalsigsten Finanzierungen die noch vor 2 Monaten nicht mal im Traum durchgegangen wären sind heutzutage anscheinend wenig problematisch..... Mich erinnert das alles an den Sommer 2007 ...... ;-) Das momentan mit den Zombie Aktien von AIG, Citi, Fannie & Freddie momentan bis zu 30-40% und "Robotrading" deutlich über 50% des Handelsvolumens in den USA ausmachen und die "Herdenmentalität" extreme Auswüchse angenommen hat deutet für mich entweder darauf hin das die Schweinegrippe doch ein größeres Problem darstellt oder das der Tipping Point nicht mehr allzu lange weg sein kann.... Ich wiederhole meine frühere Aussage
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.....

Chart Of The Day

For some perspective on the current stock market rally and how it compares the 1929-1932 bear market (which also included bank failures, bankruptcies, severe stock market declines, etc.), today's chart illustrates the duration (calendar days) and magnitude (percent gain) of all significant Dow rallies that occurred during the 1929-1932 bear market (solid blue dots). For example, the bear market rally that began in November 1929 lasted 155 calendar days and resulted in a gain of 48%. As today's chart illustrates, the duration of the current Dow rally (hollow blue dot labeled you are here) is longer than any that occurred during the 1929-1932 bear market. As for magnitude, only the November 1929 bear market rally resulted in a better performance than what has occurred during the current rally to date.
News from 1930 Daily summary based upon my reading of the Wall Street Journal from the corresponding day in 1930

There's a large amount of money on sidelines waiting for investment opportunities; this should be felt in market when “cheerful sentiment is more firmly intrenched.”

Fed. Reserve seen continuing easy credit policy pursued since start of year. Some concern that increased reserve credit “will flow into speculative channels,” but this doesn't seem to have happened much yet.

Sounds familar.....? ;-)

Kommt Euch das irgendwie bekannt vor...... ? ;-)

UPDATE:

US Equity Markets Look Dangerously Wobbly As Insiders Sell In Record Numbers

Kass Calls The Top

Four Stages of Secular Bear Markets

Barton Biggs: Markets Lagging Reality, S&P Going To 1,200

S&P 500 May Surge 40% in Duplication of Japan: Chart of the Day ( No kidding !)

Birinyi said on May 20 that the S&P 500 would climb to a record 1,700 in the next two or three years

Party Time! Wall Street Back to Its Old Highly Levered Ways

The 1929 DJIA and the 2000 Nasdaq

The "Real" Mega-Bears

European countries announce that they voluntarily increase the IMF´s funding

Hedge Funds Betting on a Deflationary Market Collapse

Mutual Fund Cash Levels Adjusted For Inflation

Where Is The Pent-Up Demand

Food stamp list soars past 35 million: USDA

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4 Comments:

Blogger jmf said...

Probably not better than expected.....


REUTERS/U. OF MICH AUG REPORT SAYS CONSUMERS' FINANCE ASSESSMENTS WORST SINCE SURVEY BEGAN IN 1946
REUTERS/U. OF MICH AUG REPORT SAYS CONSUMERS' FINANCE ASSESSMENTS WORST SINCE SURVEY BEGAN IN 1946

NNNN


2009-08-28 14:55:13
1N|ECO IND BND|USA||

7:06 AM  
Blogger jmf said...


Why Investors Need to See the Light and Slow Down

11:20 PM  
Blogger jmf said...

The Recovery Conundrum


Everywhere you see recovery, you see the hand of government: banking, autos, housing. In fact, the only part of the economy I can think of that isn’t receiving massive, direct federal subsidies, is broad consumer spending (the aforementioned clunkers and that weekly $13 tucked into your paycheck excluded.) And guess what remains weak?

10:17 AM  
Blogger jmf said...


Accumulators Are Collecting Fans Again
WSJ
HONG KONG -- An infamous destroyer of Asian wealth is making a surprise comeback.

Financial derivatives known as accumulators generated controversy last year after wiping out enormous sums among high net-worth individuals in Asia. Now, bankers say private-wealth managers at Citigroup Inc., UBS AG, HSBC Holdings PLC and other firms are back to selling stock accumulators.

The return of the accumulator -- dubbed the "I kill you later" for the financial pain these investments inflicted when markets went south last year -- reflects how rapidly the appetite for risk globally has recovered as investors bet that the worst of the economic downturn is over

10:04 PM  

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