Inside The Stock Market ...trends, cross-currents, and outlook
January 2008 Market Action
To the extent that the January Barometer can still be trusted—and in judging its recent track record, it certainly can’t—the losses in January provide a foreboding message for the bulls in early 2008.
Correction Or Bear Market? Looks To Us Like New Cyclical Bear
An update of our study on past bear markets, showing typical peak to trough declines in the popular market averages and the duration of these declines. Also look at past bear market rallies.
The Big January Surprise
Major Trend Index remains Negative; assume the cyclical bear market prevails, but we increased net equity exposure. Why?
U.S. Economy Skirts Recession In Q4, Or Does It?
It now appears that the downward bias in inflationary pressures suggested by the CPI data is tame compared to the GDP Deflator. And if this is true, investors may be operating under a false sense of security that economic growth remains positive (albeit ever so slight).
The Economy And The Stock Market
The stock market tends to peak out 6-12 months prior to recession but turns back up prior to the end of a recession.
Historical Sentiment Measures Not Showing Signs Of Bottom
In looking at Contrarian indicators compared to past major market lows, it seems today’s market has more room on the downside.
The Historical Significance Of Median P/E Valuations
70% of all the market declines since 1945 (post WWII), bottomed within 10% of the median historical normalized P/E ratio.
Playing The Bounce Final Update: Bounce Stocks Small Rally (Finally) In January
We did get a bounce stock rally in January, but it still was a disappointing bounce year overall.
Do You Believe In "Decoupling"
A popular buzz word in recent months is “decoupling”, often used in building a case for investing in fast growing foreign stock markets even though the U.S. economy is entering a phase of minimal economic growth or recession.
2008: Less Than Great
Yes, it is thermal pollution time again. It’s the new year when prognosticators and investment pundits produce large volumes of hot air, probably contributing to global warming.
Dow Double Trouble
Our VLT (Very Long Term) Momentum algorithm—alternatively known as the Coppock Curve or “Madness of Crowds”—has just rolled over after forming a rare “double top” formation. Why has the rare VLT Double Top typically proven lethal for the stock market?
December Market Action
December’s bi-polar price swings had screens flashing brilliant with traditional holiday colors of red and green.
Playing The Bounce Update: Activated In Managed Accounts As 6% Holding
In mid-December, readers were notified via an Interim Memo of our decision to “Play The Bounce” in our managed accounts.
Four Trends Worth Knowing About On The Supply/Demand Front
Four trends worth noting and their implications for 2008.
Financials: How Low Could They Go?
Expect more downside for Financials, based on the sector’s percentage of S&P 500 market cap, as well as percentage of earnings. An S&P Financial sector weight of 15% may mark the bottom.
Cyclicality Adjustment Made To Leuthol dGS Scores In December
Explanation of Cyclicals Adjustments made to GS Score methodology.
Small Caps' Stumble Is A Global Affair
Small caps have trailed the S&P 500 performance by 12-15% since peaking out on a relative basis in the spring of 2006. International small caps have broken down even more decisively on a relative basis.
Financials Sector – Comparison To S&L Crisis Paints A Bleak Picture Of What Could Lie Ahead
Performance of today’s Financial sector is somewhat tracking the performance during the S&L crisis. Paints bleak picture of what may lie ahead.
Point And Counterpoint: Big Oil
Client disputes Leuthold’s call for big oil to invest in alternative energy business. Read Steve’s in-depth rebuttal.
How Low Will The Fed Go? Bond Market May Be Offering Some Clues
In trying to assess how far the Fed may ultimately be forced to cut rates, the price action in short term Treasuries and historical yield relationships may offer some clues.
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