Griffin
Well-known member
.......which leads us to tomorrow being a possibility...
Carnac
Do you count the day they correct a FV as a FV?
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Carnac's Corner
- Thread starter The_Technician
- Start date
Do you count the day they correct a FV as a FV?
The_Technician
Active member
No, and after looking at data, today seems to have just as much possibility of a negative FV as a neutral day.....but we won't really know until later....
This FV prediction thing is new and untried (even though I have backdated tested it to some degree), so take it in consideration....
The_Technician
Active member
If we get a -FV, as of right now, the Crystal Ball says it would be in the range somewhere around 8 cents down.....
The_Technician
Active member
I will be amazed if I can predict it also.....
nnuut
Moderator | TSP Legend
The_Technician
Active member
Foreign markets and dollar movement drive the I up 10 cents....inline with local markets so far percentage wise.....at this point I would not expect an FV today.....which leads us to tomorrow being a possibility...
The Crystal Ball rules....
Carnac
Looks like this morning premise held true.....
The_Technician
Active member
Going out on a limb and trying something new here.....made some calculations and such....
next FV could be on the 19th of Oct.....
If it comes true I'll be estatic.........
Try to predict that one MM....:nuts:
The Crystal Ball rules....
Carnac
This is the prediction that I really want to see happen.....today looked like we could have had a -FV applied.....but it didn't happen.....
The_Technician
Active member
This is the day for that first trial of the FV prediction....I fund is up 5 cents this morning.....seems odd doesn't it with the foreign markets behaving the way they are today.....
The Crystal Ball rules....
Carnac
The Crystal Ball rules....
Carnac
The_Technician
Active member
The I is still up....but the dollar looks to have weaken to almost a limit, I expect it to turn stronger over the next several days....may be a bad weekend to be in the I .......
I have some things to do and can't patiently watch the markets for now so I pulled out to the F fund....
The Crystal Ball rules....
Carnac
robo
Well-known member
New Highs In The Dow Are Not Bullish
With the financial media’s preoccupation with the Dow Jones Industrial Average (DJIA) making successive, new all-time highs and breaking the round number of 12,000 today, you would think that such events signify something important and something terribly bullish. They don’t.
In fact, recent all-time record highs in the Dow bear an uncanny resemblance to the extremely negative chain of events set in motion 33 years ago – that is, at a similar point in the last Supercycle bear market period. Bob Bronson, who already had seven years of investment research and management experience under his belt by that time, remembers it well. The media’s current drive to sensationalize the Dow’s performance is being fed by TV talking heads who do not know, do not recall, and/or do not want to tell you “the rest of the story.” Here it is.
The 30-stock DJIA had reached an all-time high of 1,000 on February 9, 1966. It then declined for a period of time, following which it rebounded (the “B” in the ABC pattern of the Supercycle bear market) in what would eventually come to be seen as a bull trap[6], crossing the 1,000-mark again on November 10, 1972, six years and nine months after it first reached that record high.
The media made much out of this “psychological threshold” being crossed, which encouraged momentum-driven, short-term traders and longer-term (but unsophisticated) investors to pile in. This is as opposed to value-oriented institutional investors, who more prudently buy low and sell high. The momentum investors also did not want to miss the six-month period of relative strength in stocks that typically starts in October, but ignored the historical fact and logic idea that such relative strength only starts from a stock-market low at the end of a significant sell-off, not from the fundamental overvaluation at a stock-market high. Essentially defensive investors adopted an irrational, “defensively aggressive” strategy, indiscriminately buying the relatively safer, more conservative blue-chip stocks found especially in the winning, “safe haven” DJIA, which pushed the average higher.
As a result, the Dow made a series of successive, marginal new highs for four weeks until it finally peaked at 1,053 on January 11, 1973. This was a relatively modest 5% gain over the 1966 peak almost seven years earlier.
At the end of that four-week, classic blue-chip blow-off, the Dow started to plunge in the devastating second downleg (the “C” in the ABC pattern) of that Super-cycle bear market, ultimately declining 46%. The overall stock market dropped 49%,
the biggest decline since the catastrophic Supercycle bear market that triggered the Great Depression in the previous Supercycle bear market period. Many older Americans vividly remember that their investments were essentially wiped out during that 1973-74 decline. The whole irrational, new-highs affair proved to be no more than a relatively short-lived sucker’s rally at the end of a lengthy bull trap.
Predictably, the hoped-for six-month strong season for stocks failed. Rather than advancing to a typical May high, the stock market declined and broke its October 1972 lows by early May instead. The over-the-counter (OTC) market, predecessor to today’s high-growth, technology-laden NASDAQ index, was true to form in leading the rest of the stock market lower, breaking its previous October lows three months sooner, in early February 1973.
In many important ways, what is occurring at the present time is a near-perfect parallel with this earlier period. Just like some three decades ago, unsophisticated investors are piling into the defensive, blue-chip stocks found in the Dow as the average hits record highs, once again hoping that a six-month period of relative strength will somehow start from the fundamental overvaluation found at a stock-market high.
However, we expect a similar failure of the typically strong six-month season to occur much earlier this time because the incipient recession is already at least a year ahead when compared to the earlier period, in which a recession started in November 1973, 10 months after the final Dow high. In fact, since August, September and October 2006 have bucked their typical patterns of declines and posted individual and cumulative gains, we believe that any typical, seasonal strength in stocks is largely used up and, therefore, that this final sucker’s rally at the end of a bull trap will end before the end of the year.
The Dow Is A Defective And Misleading Measure Of The Stock Market
That the Dow Jones Industrial Average (DJIA) is making all-time new highs at all is primarily because of the particular selection of stocks in the average, as well as the odd way the index is constructed. Other stock-market indexes are weighted by their equity capitalization (that is, the number of outstanding shares of common stock multiplied by the price per share), so that the largest companies carry the most weight. The Dow Jones series of averages are weighted by price. The decision to weight by price – initially just a simple averaging of stock prices – was made in 1896 when the original 12-stock Dow Jones Industrial Average was created and has never been changed, even though it leads to some strange consequences.
For example, even though IBM and Intel have similar equity capitalizations, and Intel has daily trading dollar volume that is several times larger than IBM, IBM has been perpetually given about four times greater weight than Intel in the DJIA, simply because of the weighting based on price that each was given on the day it was added to the index.
Further, with the DJIA making all-time highs, you might think that many, if not most, of its 30 component stocks would also be making all-time highs. Not so. Like all stock indexes, no matter how they are weighted, an increasingly smaller number of stocks hitting new highs can cause the index to register a new high.
Only four Dow stocks have hit record highs since the blue-chip blow-off started on September 26. No more than two have made new highs on any of the 13 days the DJIA recently hit record highs. Only one Dow stock hit a new, record high today when the Dow broke through 12,000. This extremely narrow new-high leadership is very bearish, both shorter- and longer-term.
On average, the stocks in the DJIA are still 27% below their individual all-time highs, as seen in the table on page 10. The S&P 500 index is still 12% below its record high, and the NASDAQ composite index is still a whopping 61% below its record high, both set in March 2000. Other broad stock-market indexes are also still significantly below their previous record highs, which belies any bullish significance attached to the Dow’s recent record highs.
Just as the DJIA is not an accurate gauge of the performance of the individual stocks in it, it is also not an accurate gauge of the overall industrial sector of the U.S. economy. There are nine commonly accepted sectors in the stock market,[7] of which the industrial sector is one. As seen in the upper panel of the chart below, the industrial sector has not even broken above its previous May high, much less its March 2000 all-time high. This technical divergence between the DJIA and the industrial sector of the stock market it purports to represent acts as a negative divergence for the whole stock market.
http://www.financialsense.com/editorials/bronson/2006/1019.html
Henry thinks we rally the next several months, but we need some bear comments to keep us on our guard. I'm also bullish. I always have the mute on when I watch CNBC and I never watch Kudlow. He puts out The Greatest Bull**** ever told! I'm postive on US stocks, but in the G Fund for now. The Trend remains up!
With the financial media’s preoccupation with the Dow Jones Industrial Average (DJIA) making successive, new all-time highs and breaking the round number of 12,000 today, you would think that such events signify something important and something terribly bullish. They don’t.
In fact, recent all-time record highs in the Dow bear an uncanny resemblance to the extremely negative chain of events set in motion 33 years ago – that is, at a similar point in the last Supercycle bear market period. Bob Bronson, who already had seven years of investment research and management experience under his belt by that time, remembers it well. The media’s current drive to sensationalize the Dow’s performance is being fed by TV talking heads who do not know, do not recall, and/or do not want to tell you “the rest of the story.” Here it is.
The 30-stock DJIA had reached an all-time high of 1,000 on February 9, 1966. It then declined for a period of time, following which it rebounded (the “B” in the ABC pattern of the Supercycle bear market) in what would eventually come to be seen as a bull trap[6], crossing the 1,000-mark again on November 10, 1972, six years and nine months after it first reached that record high.
The media made much out of this “psychological threshold” being crossed, which encouraged momentum-driven, short-term traders and longer-term (but unsophisticated) investors to pile in. This is as opposed to value-oriented institutional investors, who more prudently buy low and sell high. The momentum investors also did not want to miss the six-month period of relative strength in stocks that typically starts in October, but ignored the historical fact and logic idea that such relative strength only starts from a stock-market low at the end of a significant sell-off, not from the fundamental overvaluation at a stock-market high. Essentially defensive investors adopted an irrational, “defensively aggressive” strategy, indiscriminately buying the relatively safer, more conservative blue-chip stocks found especially in the winning, “safe haven” DJIA, which pushed the average higher.
As a result, the Dow made a series of successive, marginal new highs for four weeks until it finally peaked at 1,053 on January 11, 1973. This was a relatively modest 5% gain over the 1966 peak almost seven years earlier.
At the end of that four-week, classic blue-chip blow-off, the Dow started to plunge in the devastating second downleg (the “C” in the ABC pattern) of that Super-cycle bear market, ultimately declining 46%. The overall stock market dropped 49%,
the biggest decline since the catastrophic Supercycle bear market that triggered the Great Depression in the previous Supercycle bear market period. Many older Americans vividly remember that their investments were essentially wiped out during that 1973-74 decline. The whole irrational, new-highs affair proved to be no more than a relatively short-lived sucker’s rally at the end of a lengthy bull trap.
Predictably, the hoped-for six-month strong season for stocks failed. Rather than advancing to a typical May high, the stock market declined and broke its October 1972 lows by early May instead. The over-the-counter (OTC) market, predecessor to today’s high-growth, technology-laden NASDAQ index, was true to form in leading the rest of the stock market lower, breaking its previous October lows three months sooner, in early February 1973.
In many important ways, what is occurring at the present time is a near-perfect parallel with this earlier period. Just like some three decades ago, unsophisticated investors are piling into the defensive, blue-chip stocks found in the Dow as the average hits record highs, once again hoping that a six-month period of relative strength will somehow start from the fundamental overvaluation found at a stock-market high.
However, we expect a similar failure of the typically strong six-month season to occur much earlier this time because the incipient recession is already at least a year ahead when compared to the earlier period, in which a recession started in November 1973, 10 months after the final Dow high. In fact, since August, September and October 2006 have bucked their typical patterns of declines and posted individual and cumulative gains, we believe that any typical, seasonal strength in stocks is largely used up and, therefore, that this final sucker’s rally at the end of a bull trap will end before the end of the year.
The Dow Is A Defective And Misleading Measure Of The Stock Market
That the Dow Jones Industrial Average (DJIA) is making all-time new highs at all is primarily because of the particular selection of stocks in the average, as well as the odd way the index is constructed. Other stock-market indexes are weighted by their equity capitalization (that is, the number of outstanding shares of common stock multiplied by the price per share), so that the largest companies carry the most weight. The Dow Jones series of averages are weighted by price. The decision to weight by price – initially just a simple averaging of stock prices – was made in 1896 when the original 12-stock Dow Jones Industrial Average was created and has never been changed, even though it leads to some strange consequences.
For example, even though IBM and Intel have similar equity capitalizations, and Intel has daily trading dollar volume that is several times larger than IBM, IBM has been perpetually given about four times greater weight than Intel in the DJIA, simply because of the weighting based on price that each was given on the day it was added to the index.
Further, with the DJIA making all-time highs, you might think that many, if not most, of its 30 component stocks would also be making all-time highs. Not so. Like all stock indexes, no matter how they are weighted, an increasingly smaller number of stocks hitting new highs can cause the index to register a new high.
Only four Dow stocks have hit record highs since the blue-chip blow-off started on September 26. No more than two have made new highs on any of the 13 days the DJIA recently hit record highs. Only one Dow stock hit a new, record high today when the Dow broke through 12,000. This extremely narrow new-high leadership is very bearish, both shorter- and longer-term.
On average, the stocks in the DJIA are still 27% below their individual all-time highs, as seen in the table on page 10. The S&P 500 index is still 12% below its record high, and the NASDAQ composite index is still a whopping 61% below its record high, both set in March 2000. Other broad stock-market indexes are also still significantly below their previous record highs, which belies any bullish significance attached to the Dow’s recent record highs.
Just as the DJIA is not an accurate gauge of the performance of the individual stocks in it, it is also not an accurate gauge of the overall industrial sector of the U.S. economy. There are nine commonly accepted sectors in the stock market,[7] of which the industrial sector is one. As seen in the upper panel of the chart below, the industrial sector has not even broken above its previous May high, much less its March 2000 all-time high. This technical divergence between the DJIA and the industrial sector of the stock market it purports to represent acts as a negative divergence for the whole stock market.
http://www.financialsense.com/editorials/bronson/2006/1019.html
Henry thinks we rally the next several months, but we need some bear comments to keep us on our guard. I'm also bullish. I always have the mute on when I watch CNBC and I never watch Kudlow. He puts out The Greatest Bull**** ever told! I'm postive on US stocks, but in the G Fund for now. The Trend remains up!
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mayday
Active member
Thats a good article robo. Spooky most likely a good indication of what is about to happen. The market seems very tired. I'm wondering if there's enough wind in the sails to make it to election day. Oil will probably go up past 60.00 very soon with the million barrel a day cut. I do'nt want to be in stocks when the sell off happens. The bull trap will happen when there seems to be no end to the rally.or when Democrats get the house gotta blame it on someone.
The_Technician
Active member
I never could relate the DOW 30 to the real market because it contained so few stocks......heck alot of the market is currently down right now.....1973 was a bit different in several aspects if I remember correctly, oil went sky high (they said we were runnning out of oil), interest rates were out of control, not wonder why the economy went in the skids.....todays economy is much different and is controlled using a brand of control system theory, the only thing that would and could knock it off its feet is like nuclear war.....or some other major disaster......
I wouldn't exactly get super cold feet today....but I would be bearish when the time is right.....
The_Technician
Active member
Oh by the way, the I is netting zero today.....was there an FV yesterday??? I really hadn't been able to look....
The_Technician
Active member
Dang, I wonder if I saw something that I need to go back to look at again.....
Ok, went and looked..... the dollar was bottoming out and it should get stronger over the next several days...not good for the I with the I in an extremely high position.....thats what I saw the other day....
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mayday
Active member
I never could relate the DOW 30 to the real market because it contained so few stocks......heck alot of the market is currently down right now.....1973 was a bit different in several aspects if I remember correctly, oil went sky high (they said we were runnning out of oil), interest rates were out of control, not wonder why the economy went in the skids.....todays economy is much different and is controlled using a brand of control system theory, the only thing that would and could knock it off its feet is like nuclear war.....or some other major disaster......
I wouldn't exactly get super cold feet today....but I would be bearish when the time is right.....
After robos comments I read about the anniversary of Black Monday in 1987. The market plummeted 22.6% in a day. If that kind of drop happened today the index would have lost 2710 points.Can you imagine that kind a whoopin.
robo
Well-known member
I remember it well since my Birthday is on 19th of October. I was invested in American Century Growth Fund. No way it happens again anytime soon. The Market is starting to turn into a pure momentum play and NO ONE seems to care about fundamentals. I have been making short-term plays in the I Fund and I’m also trying some S Fund from time to time. No more then 20% and short-term. Keep in mind I’m in my 50’s or I would be taking a lot more risk then I’m currently taking. Henry is 100% long and he recommends waiting for a pullback to buy this Market. Bob Brinker is in the same camp new money buy around 1250 S&P, (Long gone) or dollar cost averge for new money. Bob stated 1350 or higher for the S&P for 2006 months ago. I'm waiting to see what he thinks for 2007. He is a Market timer, but makes very few moves. He has been long on the S&P 500 since around 800. Nice run!
The watch is on for oil, earnings, the election and the Fed. Still no sellers lately so the trend is up until it is not! I always try and post both sides bullish and bearish articles. NO GURU'S OUT THERE JUST OPINIONS, EVERYONE GETS IT CORRECT SOME OF THE TIME, NO ONE GETS IT CORRECT ALL OF THE TIME! However, if your a long-term investor it's all noise. Many of us on the board are trend traders and manage our accounts actively not recommended for the average person.
robo
Well-known member
October 21, 2006
That Permanently High Plateau
by John Mauldin
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as they have predicted. I expect to see the stock market a good deal higher within a few months." - Dr. Irving Fisher, Professor of Economics at Yale University, one of the most important US economists of his day, speaking on October 17, 1929, a few weeks before the Great Crash.
"What," more than a few readers ask, "do you think of the new highs on the Dow? Don't you have to admit we are not in a secular bear market? Can't you just enjoy the new bull?" If it were a matter of just admitting I'm wrong, that would be the easy part. I have been wrong lots of times and will be wrong again. But the data keeps telling me that there is more to the story. This week we look at earnings and investor expectations. In the man bites dog category, we visit with a very mainstream analyst who says earnings will fall next year. But companies are going to trumpet much higher earnings. There is a coming dissonance that suggests a problem in future valuations
http://www.safehaven.com/article-6129.htm
I don't agree with all articles I post, but warnings should never be ignored when you actively manage your account.
That Permanently High Plateau
by John Mauldin
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as they have predicted. I expect to see the stock market a good deal higher within a few months." - Dr. Irving Fisher, Professor of Economics at Yale University, one of the most important US economists of his day, speaking on October 17, 1929, a few weeks before the Great Crash.
"What," more than a few readers ask, "do you think of the new highs on the Dow? Don't you have to admit we are not in a secular bear market? Can't you just enjoy the new bull?" If it were a matter of just admitting I'm wrong, that would be the easy part. I have been wrong lots of times and will be wrong again. But the data keeps telling me that there is more to the story. This week we look at earnings and investor expectations. In the man bites dog category, we visit with a very mainstream analyst who says earnings will fall next year. But companies are going to trumpet much higher earnings. There is a coming dissonance that suggests a problem in future valuations
http://www.safehaven.com/article-6129.htm
I don't agree with all articles I post, but warnings should never be ignored when you actively manage your account.
nnuut
Moderator | TSP Legend
1987 Ahh, I remember, I was 100% "G" fund. Back then as I remember all we had was the "G" and the limit for contributions was 5%.
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