Inside The Stock Market ...trends, cross-currents, and outlook
Playing The Bounce 2008—Market Due For A Bounce In December
It may not be a very good “Playing The Bounce” year. Not very many investors or portfolio managers have capital gains to offset.
Bear Market Epitaph?
While we can’t be certain that the final figures for the bear market have been booked, it’s worth putting the last 14 months of action into perspective.
Playing The Bounce 2008—Market Due For A Bounce In November
It may not be a very good “Playing The Bounce” year...
As The Smoke Clears
Based on economic recessions, the sweet spot for stock accumulation seems to be upon us. Valuations also very compelling.
Normalized Earnings…..A Primer
Normalized P/E ratios show stock market to be cheap, but what are “normalized earnings”? We present our methodology and rationale is this month’s “Inside The Stock Market” section. While U.S. stocks are cheap, foreign stock markets look even cheaper.
October Capitulation
There was $84 billion coming out of U.S. stock and bond funds in October, the highest net redemptions ever. Second highest month of outflow came in September 2008 (just a month earlier). To us, this looks like a case of capitulation by the public.
Sector Ups and Downs During Bear Markets And Recoveries
Info Tech has demonstrated an ability to lead coming out of bear markets, but still not seeing overall GS Score strength in the sector.
October Panics: Plenty Of Facts, But No Explanations
Mark Twain observed more than a century ago that October represented a “peculiarly dangerous” month to speculate in stocks—with the other dangerous times including the remaining 11 months on the calendar.
The Beginning Of The End.....Yes, We’re Talking About The Bear Market
September was a horrible month for the stock market, but now is not the time to be selling stocks. We believe a market bottom is close at hand, and this month’s “Inside The Stock Market” section presents several of our “big picture”, historical market studies to provide support for this belief.
Financial Crises: A Historical Perspective
Doug Ramsey examines the history of bank failures and prior liquidity crises (back to 1830) to demonstrate that this current financial meltdown is not unprecedented. The names have changed, but the economic and emotional responses have been loosely patterned over the entire time frame.
Technical Comment: No Worries Over “Dow Theory?"
Dow Theorists looking at current market environment may be concluding stocks could weaken further. However, historically when confirmation from the Transports takes an excessively long time to develop (like it has currently), the technical pattern has actually provided an excellent buy signal.
That Time Of Year For Tech??
We have found that technology has the strongest seasonal tendency of any sector during the market’s “bullish” seasonal period of November through April.
Playing The Bounce 2008 - Most Of The Market Due For A Bounce
October brings our annual exercise in the “Playing The Bounce” strategy. This month’s “Inside The Stock Market” presents the initial run of stocks which may be subject to heavy tax loss selling. Traditionally, these stocks may be poised to “bounce” back early in the next year as selling pressure wanes.
We're Bullish (And Hoping For “Small” Gains)
Improving cyclical leadership could be signaling that the bear market is in its final stages. In 10 of the 12 past bear markets, cyclical stocks turned up prior to the conclusion of the bear.
Crude Oil Regression Analysis
Analyst estimates for oil stock earnings never seem to fully capture the impact that the price of oil has on their earnings.
August Market Action
The broad market continued to trace out a labored recovery from the July lows, yet the day to day performance volatility continued to keep many market participants from getting too comfortable with the trend.
Context For Today's Financial Mess
Think we’ve never seen such turmoil in the financial sector? Back in 1986-1995, the S&L crisis wiped out about half of the federally insured thrifts (from 3234 to 1645).
Materials: From First To Worst
Materials sector has fallen fast and hard in our GS Score rankings and is now the worst rated. Still see further downside based on valuations and technical factors. No, we do not think the underlying commodities can outperform while the stocks fall.
Small Cap Outperformance: More Questions Than Answers
Small cap out performance so far in 2008 is baffling. Earnings growth has been weak relative to large caps and valuations are still excessive. Interestingly, EAFE Small Cap Index is underperforming, while its U.S. counterparts are doing well.
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