Wednesday, September 15, 2010

BULL 2004

Bulls can go sideways for a period time, after initial big move from 2002/2003 lows almost ONE YEAR breather was taken, but by OCT 2004 she took off.
This recovery was known as the "jobless recovery" but that may be true, many people WERE put to work in housing, construction, finance, autos.....maybe not typical of past recoveries in sheer numbers.
Plenty though to goose economy, spending, banks were lax, the housing BOOM/BUBBLE was really perculating next few years.....
Now fast forward to 2010.
Lower market, last high APRIL....current trading range 1040-1129.
Housing not going to perculate, nor autos, consumer spending ismostly for needs not wants. 8 MILLION PLUS not employed since this the new normal...and NO JOBS....if 2003-2007 was "jobless recovery" what the heck is this one?
Earnings have peaked 5 months ago this cycle....5 month of declines in estimates NOT typical of any bull market.
Fed's BEIGE BOOK reported "deterioration signs in economy" and these were widespread.
AAII sentiment readings soared in a VERY SHORT TIME is intro from AAI website link provided for full story MUST READ AAII.COM

Sentiment Surveys SEPT 10th

"Hard to believe it was just three weeks ago that retail investors showed some meaningful amount of concern. As you may recall, in late August the AAII bull ratio fell below 30%. This is an arbitrary “line in the sand” that I watch as a signal that we’ve arrived at an extreme."

"And now, suddenly retail investors are feeling just fine (again). The bull ratio this week is slightly above 58% with 44% forecasting the market to rise and 32% believing it will fall:"

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