Taking the bear market rally for granted

[Lysglimt]

By: Hans LysglimtMissing the rally are you?Feel the itch to buy shares are you?Great. The stronger your itch to buy, the stronger the reason not to.This rally is driven by itches, just like yours.But, you have to keep your head cool to see this.The cheep are now being herded back into the markets, to be [...]

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[goldfinger]

By: Hans LysglimtMissing the rally are you?Feel the itch to buy shares are you?Great. The stronger your itch to buy, the stronger the reason not to.This rally is driven by itches, just like yours.But, you have to keep your head cool to see this.The cheep are now being herded back into the markets, to be [...]

More... (http://www.farmann.no/taking-the-bear-market-rally-for-granted/)

What do you think of the Elliot Wave forecast of the sensex going to 100000 within 15 years?

I must say I am skeptical that this is a bear market, it seems overbought, but I think the trend is up. The yield curve is very steep now. Guys like Albert Edwards (that seems like a prophet of the deflation camp) were predicting very bearish scenarios, and saying analysts were in la-la land, predicting earnings to surprise on the downside this earnings season. It turned out he was very wrong. It was a couple months the bond market agreed with him, but now it is no consensus for his views anymore, as the bond market is back to seeing inflation. It would not surprise me if he will continue to be wrong. Warren Buffet is more skeptical it seems.But it's not cooling the market's. You are right. It's the catch up buying that is starting now. Even guys that were bearish, and on the wrong side lately that are changing side. Maybe it's going back to stagflation, sort of like the market from 1971 or 75, and then emerging market's decouple.

[Lysglimt]

"catch up buying" - I like that phrase goldfinger, it pretty much sums up today's rally.

[goldfinger]

Yes, but I fail to see the difference between now, and the recovery from 2003.


http://finance.yahoo.com/echarts?s=POT#chart9:symbol=pot;range=5y;compare=^ tyx+pbr;indicator=volume;charttype=line;crosshair= on;ohlcvalues=0;logscale=on;source=undefined

To me, it just looks like a normal recovery to a new world, where government bonds will start to trend lower, like compare the yields on the 30 year, to potash or petrobras. Since December those things have been in a bull-market.

[larso]

It sure is a rally, isn't it? We do have cheap money, and will continue to have so for a long time. Stocks, good and bad took a severe beating over the last 1 1/2 years, so why shouldn't one pick up some from the rubble? As for banks the governments around have secured their re-capitalization. Pick the survivors and you'll be fine. I don't like the term "market" as if all stocks were equally good. There are some real rotten apples out there as well as some nuggets. The challenge is to distinguish, no easy task. The jury is of course still out on the doomsday prophesies, but for now I think that once more we'll muddle through.

[goldfinger]

It's similar to the 98 correction in my opinion. It's just a bigger crisis, and even bigger doses of medicine used to correct it, and the money will morph into something new, but what? Maybe a long term trend of runaway inflation.

[Lysglimt]

My opinion is that this recession/depression is different.
This is not just another dip that can be corrected with easy money.

The signals for this are:
- Losses bigger than ever.
- Global phenomenon.
- Banks insolvent.
- Investment banks going belly up.
- The FED has broken their conservative monetary policy.
- Demographic crash might become catch us up during this depression and strengthen it.

So this is different.
That's why looking for similarities in earlier recessions might not reveal much.
It could recover, yes.
But it could also become really really nasty, the whole scaffolding crumbling down.

[goldfinger]

My opinion is that this recession/depression is different.
This is not just another dip that can be corrected with easy money.

The signals for this are:
- Losses bigger than ever.
- Global phenomenon.
- Banks insolvent.
- Investment banks going belly up.
- The FED has broken their conservative monetary policy.
- Demographic crash might become catch us up during this depression and strengthen it.

So this is different.
That's why looking for similarities in earlier recessions might not reveal much.
It could recover, yes.
But it could also become really really nasty, the whole scaffolding crumbling down.
But what about the people who was very bearish that thought analysts was over optimistic about earnings, and that this earnings season was going to be horrible. It turned out they was wrong. If they was wrong about that, then maybe they are wrong about a lot of other things as well. I suspect there perhaps were some spectacular mistakes by the fed in letting bear sterns and lehman fail, that made these uber bearish people look smart for a while. Are you sure you are not making a mistake in thinking you are smarter than the market? and closing yourself to the possibility that it will work out just fine? There was about a V shaped recovery in China on financial times, short view, yesterday. I think it was good.

[cash]

Les krakkfasit-tråden på hegnar.no

vi er i et bear rally, alt går etter manuset. Retracement rally før videre nedgang, jeg gjør meg klar for å kjøpe bear derivater

[goldfinger]

Les krakkfasit-tråden på hegnar.no

vi er i et bear rally, alt går etter manuset. Retracement rally før videre nedgang, jeg gjør meg klar for å kjøpe bear derivater

Jeg kan forestille meg du bruker et slags 1929, dette er 1930, og snart skal gullaksjer komme i siget scenario. Det er et mulig scenario, men det ser ikke særlig sannsynlig ut hittil. Et 1938 eller 1975 scenario virker langt mer troverdig sånn jeg ser det. (2000 = 1929) 2009 = 1938, eventuelt 1965 / 2000, og 1974 / 2009.

Alikevel. Jeg har sammenlignet gull med nasdaq her. Gull har oppført seg slik som nasdaq i perioden 1991-1998, på den måten at gull enda har igjen å bryte oppover slik nasdaq gjorde etter 1999. Så bare teknisk, basert på den likheten, kan det se ut som gull kan bryte ut ganske snart. Men det har ikke skjedd.

[Lysglimt]

goldfinger,

Er ydmyk, og burde være mer ydmyk.
Viktig å beskytte seg selv fra seg selv, spesiellt om man tror man er smartere en markedet.
Det finnes måter å beskytte seg selv fra seg selv på, det bør man gjøre.