Doug Short is not a fear monger nor is he prone to making
wild predictions. In this chart and
brief excerpt he presents market history…frightening though it may be.
HISTORY LESSON FROM DOUG SHORT (Advisor Perspectives)
http://advisorperspectives.com/dshort/updates/PE-Ratios-and-Market-Valuation.php
THERE IS A DECENT CHANCE STOCKS WILL CRASH: HENRY BLODGET
(Yahoo Finance)
[Henry Blodget is editor and CEO of The Business Insider,
a business news and analysis site, and a host of Yahoo Daily Ticker, a finance
show on Yahoo.] It looks like Henry
Blodget reads John Hussman, because Blodget’s thesis parallels recent writings
by Hussman.“1) Stocks are expensive relative to earnings.
2) Earnings are much higher than normal.” Story at…
http://finance.yahoo.com/blogs/daily-ticker/decent-chance-stocks-crash-henry-blodget-133316120.html
I’ve posted dozens of these crash stories over the past
year or two. It is easy to predict a
crash; you’ll always be right. The
question is when? Without a catalyst, I don’t see a crash, yet.
2013 STOCK MARKET AN EXACT REPLICA OF 1954? (Profit
Confidential)
“A story that ran in Bloomberg on Monday said the
movement we see in the S&P 500 now is an almost exact duplicate of what we
saw in 1954—a year in which the S&P 500 rose 45%...Comparing the 2013 rally
to the rally of 1954 is just outright wrong. The fundamentals behind the two
stock market rallies (1954 and 2013) are very different…In the year following 1954, U.S. gross domestic product
(GDP) increased more than seven percent. (Source: Federal Reserve Bank of St.
Louis web site, last accessed October 2, 2013.)… In the second quarter of 2013,
U.S. GDP came in at an anemic annual pace of 2.5%. The Federal Reserve expects
U.S. GDP to slow in 2014. In 2015, the Fed expects GDP to run 3.0%-3.5%. For
2016, it expects a GDP of 2.5%-3.3%. (Source: “Economic Projections,” Federal
Reserve, September 18, 2013.)…2013 is no 1954!”
“The
U.S. economy was booming 60 years ago!
Dear
reader, the key stock indices are rising on nothing but the Federal Reserve
printing tons of paper money.” I’ve
excerpted just a few nuggets from this piece.
Read the full analysis, news and commentary at…http://www.profitconfidential.com/stock-market/2013-stock-market-an-exact-repeat-of-1954/
MARKET REPORT
Friday, the S&P finished up 0.7% to 1691 (rounded) at the close.
VIX fell 5% to 16.74.Friday, the S&P finished up 0.7% to 1691 (rounded) at the close.
MARKET INTERNALS (NYSE DATA)
The 10-day moving average of stocks advancing on the NYSE
rose to 49% Thursday from 45% Thursday.
(A number below 50% for the 10-day average is generally bad news for the
market.)
New-highs outpaced new-lows Friday, leaving the spread
(new-hi minus new-low) at +114 (it was +55 Thursday). The 10-day moving average of change in the
spread is minus 2. That just means that over the last 10-days, the spread has
been getting worse.
Market Internals are Negative on the market for this
short term indicator, but not by much.
NTSM
Friday, the overall long-term NTSM analysis remains HOLD at
the close,
The 5-day, percent-bulls (bulls/(bulls+bears) in the Guggenheim/Rydex
funds I track was 67%-bulls as of Thursday’s close. That is an extreme bullish
value that is usually a negative for the markets. “USUALLY” is the key word here. I suspect the crowd is betting that the
political impasse will be resolved easily.
If it is, the bet might be right. On the other hand, it is not clear to me that
the market is falling solely due to political wrangling.
MY INVESTED POSITION
I remain about 20% invested in stocks as of 5 March (S&P 500
-1540). The NTSM system sold at
1575 on 16 April. (This is just another
reminder that I should follow the NTSM analysis and not act emotionally – I am
under-performing my own system by about 2%!)
I have no problems leaving 20% or 30% invested. If the market is cut in half (worst case) I’d
only lose 10%-15% of my investments. It
also hedges the bet if I am wrong since I will have some invested if the market
goes up. No system is perfect.
