Technically Speaking
by Bradley J. Fluetsch, CFA
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Technically Speaking
Growth or Value does it matter?
I wanted see if the Growth / Value debate still existed and to see who is winning.
So I ran a number of charts comparing IWM Russell 2K against IWN, Russell 2K Value and IWO Russell 2K Growth in different time frames.
One Year
Three year
Five year
Last decade
Conclusion, the debate must be raging. Growth has outperformed for the last five years but has not made up for the significant under-performance from the beginning of the decade. What is surprising is how bad value performed in the 2008 market collapse ( I am betting on financials were in the value side of of the index divide)
Sorry no answer here.
So I ran a number of charts comparing IWM Russell 2K against IWN, Russell 2K Value and IWO Russell 2K Growth in different time frames.
One Year
Three year
Five year
Last decade
Conclusion, the debate must be raging. Growth has outperformed for the last five years but has not made up for the significant under-performance from the beginning of the decade. What is surprising is how bad value performed in the 2008 market collapse ( I am betting on financials were in the value side of of the index divide)
Sorry no answer here.
Pump and dump?
I have been wrong on the markets for the last 28 days.
When the market made lows on Oct 3, I was looking for a continued decline for another 8 percent to test the June 2010 lows about 100 on SPY.
I have not heard otherwise, but I understand flash or computer trading represents over half the volume on the exchanges. It just makes one wonder the behavioral finance embedded in their algorithms on how to create reactions as opposed to predict them? This market move and all the European hype leaves me with the feeling of a Central Bank lead pump and dump, so I dumped the last of my wife's equity holdings this morning.
Happy Halloween, but it is November that spooks me.
When the market made lows on Oct 3, I was looking for a continued decline for another 8 percent to test the June 2010 lows about 100 on SPY.
I have not heard otherwise, but I understand flash or computer trading represents over half the volume on the exchanges. It just makes one wonder the behavioral finance embedded in their algorithms on how to create reactions as opposed to predict them? This market move and all the European hype leaves me with the feeling of a Central Bank lead pump and dump, so I dumped the last of my wife's equity holdings this morning.
Happy Halloween, but it is November that spooks me.
Don't be the last fool!
So at the beginning of October the market was heading into "Bear" territory and I felt quite comfortable! It was what I have been expecting and it was confirmation of my investment thesis and clients were in defensive positions. I can understand a oversold rally, but really 108 to 125 on SPY? On what news people? Europe may print a boat load of Euro's to prop up failed bureaucracies?
So in today's rally I decided to do something I have not done since 2006 when my wife's employer adopted this retirement plan through John Hancock, I traded her account. She had seven stock funds mostly international and small mid caps, very aggressive allocation. I sold five of the seven stock funds and put the two largest in Pimco Total Return Bond Fund and the Pimco Global bond fund with the rest going into cash. (I know I cannot stand Bill Gross or Pimco, but it is the only bond fund choices in the plan)
As a said before, I understand a short covering rally, but I have concluded that someone is manufacturing this rally for a purpose. Beware this rally stands on a foundation of quicksand so be a seller and don't buy the hype.
So in today's rally I decided to do something I have not done since 2006 when my wife's employer adopted this retirement plan through John Hancock, I traded her account. She had seven stock funds mostly international and small mid caps, very aggressive allocation. I sold five of the seven stock funds and put the two largest in Pimco Total Return Bond Fund and the Pimco Global bond fund with the rest going into cash. (I know I cannot stand Bill Gross or Pimco, but it is the only bond fund choices in the plan)
As a said before, I understand a short covering rally, but I have concluded that someone is manufacturing this rally for a purpose. Beware this rally stands on a foundation of quicksand so be a seller and don't buy the hype.
Don't look this gift horse in the mouth!
Any of you notice the market is up nearly 10 percent from it most recent brush with a "technical" bear market? No worries, use this short covering, hedge-fund driven rally to unload your U.S. Equities and buy quality, short duration, non-US government bonds (Canada, Australia, Switzerland, Norway) and variable rate, high quality global corporate debt.
Just a few short days ago I was looking for another eight percent decline, now it is 18 percent from here. Once we get to where I think the market is going, a shopping list is in order.
XLE tops my shopping list! MOO and IYR look like cheap too.
Internationally speaking
Wait for the sell off before you go long.
Just a few short days ago I was looking for another eight percent decline, now it is 18 percent from here. Once we get to where I think the market is going, a shopping list is in order.
XLE tops my shopping list! MOO and IYR look like cheap too.
Internationally speaking
Wait for the sell off before you go long.
SPY... risk to 101, lets hope it holds!
So it has been awhile since I wrote something but I have been busy campaigning for public office. The election is tomorrow and the light at the end of the tunnel has brought me this vision, a chart!
See that low, let us all hope that it will hold! You do not want to see a three year chart plotting other lows, nobody wants to see them again!
Please figure it out Europe, Congress or maybe the Mayan's calendar is really a trading calendar and it is the end of the financial system! FIGURE IT OUT!
Take the hair cuts!
See that low, let us all hope that it will hold! You do not want to see a three year chart plotting other lows, nobody wants to see them again!
Please figure it out Europe, Congress or maybe the Mayan's calendar is really a trading calendar and it is the end of the financial system! FIGURE IT OUT!
Take the hair cuts!
Sarbanes Oxley for State and Municipal Governments
Congress,
It is high time that regulations regarding government books and accounting methods be streamlined, homogenized, and made accountable! Even the most educated and informed analyst cannot ascertain the financial position of the State or Municipal entity in real time.
Therefore, I propose a Sarbanes Oxley like bill that delineate standards and reporting requirements for any entity that issues bonds that are exempt of United States Federal Income Tax. That the Mayor, Manager and top Financial Officer sign off on with equal consequences of Sarbanes-Oxley.
What do you think? Off base or on target?
Do investors in Municipal and State governments have the same rights to financial and operational information that investors in for profit, publicly traded companies? I THINK SO!
It is high time that regulations regarding government books and accounting methods be streamlined, homogenized, and made accountable! Even the most educated and informed analyst cannot ascertain the financial position of the State or Municipal entity in real time.
Therefore, I propose a Sarbanes Oxley like bill that delineate standards and reporting requirements for any entity that issues bonds that are exempt of United States Federal Income Tax. That the Mayor, Manager and top Financial Officer sign off on with equal consequences of Sarbanes-Oxley.
What do you think? Off base or on target?
Do investors in Municipal and State governments have the same rights to financial and operational information that investors in for profit, publicly traded companies? I THINK SO!
Why don't I believe?
For some reason I cannot take members of Congress serious when they start talking about spending today and cuts tomorrow. The U.S. House is elected every two years and this House has no ability to control the actions of future "Houses" short of law or a Constitutional amendment, therefore any plan with austerity down the road rings false.
Sure everyone wants stronger economic growth and yes it makes the next few years of austerity a bit easier to swallow, however we must remember that the U.S. economy has been on high powered financial steroids for the past 15 years and all those statistics are about as good as Barry Bonds season home run record.
I am amused by the financial steroid dealers like Paul Krugman who think the U.S. economy can make a comeback as Barry can comeback with just another huge dose of steroids and lead the majors in hitting and homers with San Francisco Giants winning the World Series. Frankly, I am somewhat amazed at the number of educated people who either prescribe or cheer for financial steroids. Thank God these same folks don't run the NCAA, could you imagine the freak show of athletes America would field?
If America wants to create jobs, President Obama should FIRE Secretaries Vilsack, Jackson, and Salazar for a starter. If President Obama wants construction jobs, then America needs a five year vacation from the endangered species act., roadless rules, wilderness designations and any intervention of the Federal Courts in resource development. Why America has conceded management of its land and resources to the Courts and not Department of Interior is beyond me, but the number one job killer in America is the Federal Court system.
Sure everyone wants stronger economic growth and yes it makes the next few years of austerity a bit easier to swallow, however we must remember that the U.S. economy has been on high powered financial steroids for the past 15 years and all those statistics are about as good as Barry Bonds season home run record.
I am amused by the financial steroid dealers like Paul Krugman who think the U.S. economy can make a comeback as Barry can comeback with just another huge dose of steroids and lead the majors in hitting and homers with San Francisco Giants winning the World Series. Frankly, I am somewhat amazed at the number of educated people who either prescribe or cheer for financial steroids. Thank God these same folks don't run the NCAA, could you imagine the freak show of athletes America would field?
If America wants to create jobs, President Obama should FIRE Secretaries Vilsack, Jackson, and Salazar for a starter. If President Obama wants construction jobs, then America needs a five year vacation from the endangered species act., roadless rules, wilderness designations and any intervention of the Federal Courts in resource development. Why America has conceded management of its land and resources to the Courts and not Department of Interior is beyond me, but the number one job killer in America is the Federal Court system.
Some suggest stocks are cheap
Many pundits suggest that stocks are cheap and claim that PE ratios are at historically cheap levels!
Well, those pundits should consider that investors are discounting the value of those dollar based earnings in the future. Sure the SP 500 might earn $110 in 2012 but those $110 dollars will only be worth $85 given Fed Chairman Bernanke's pension for printing dollars.
When America's monetary policy is entirely made up of how many dollars should we print, and economists from the Obama Administration and leading academic institutions like Harvard, Princeton, Columbia, and University of Chicago all recommend printing money as the cure all, we are close to the end!
The thought that the Euro zone is worse off and have even bigger idiots in-charge of fiscal and monetary policy is no reassurance, but does impact how fast the US dollars falls relative to other currencies.
Well, those pundits should consider that investors are discounting the value of those dollar based earnings in the future. Sure the SP 500 might earn $110 in 2012 but those $110 dollars will only be worth $85 given Fed Chairman Bernanke's pension for printing dollars.
When America's monetary policy is entirely made up of how many dollars should we print, and economists from the Obama Administration and leading academic institutions like Harvard, Princeton, Columbia, and University of Chicago all recommend printing money as the cure all, we are close to the end!
The thought that the Euro zone is worse off and have even bigger idiots in-charge of fiscal and monetary policy is no reassurance, but does impact how fast the US dollars falls relative to other currencies.
Markets say USA is going into - in RECESSION
You cannot take the steroids away (QE2) and expect the athlete to improve their performance in the short-term. Isn't that obvious to everyone?? Why anyone is bullish for the second half of 2011 or think anything good will happen in the first half of 2012 is ignoring the bond market, stock market, economics and the political situation in the USA.
First, the markets are a leading indicator. The market is discounting the next 12 months and when QE2 ended in June and Congress and the Obama Administration had their tantrums in July, the markets are in the process of changing its expectations for the next 12 months. Sure, the Fed could do something and its impact on future economic events would have to be discounted. Same with Congress and the Obama Administration. Say President Obama did something smart and gave every Governor three infrastructure projects to choose and exempted them from the excessive Federal regulations that obstruct the development of infrastructure.
The markets may fall off the cliff, but the economy will continue to muddle along at a maintenance level pace. Surprise, China and much of the emerging markets are still growing (more demand tomorrow than today) just at a slower pace. That is quite different that Europe of the USA where we are contracting (less demand tomorrow than today) Together, global growth will be flat to contracting in the near term until Europe and USA put their financial houses in order. BTW, that does not mean borrow and spend more.
First, the markets are a leading indicator. The market is discounting the next 12 months and when QE2 ended in June and Congress and the Obama Administration had their tantrums in July, the markets are in the process of changing its expectations for the next 12 months. Sure, the Fed could do something and its impact on future economic events would have to be discounted. Same with Congress and the Obama Administration. Say President Obama did something smart and gave every Governor three infrastructure projects to choose and exempted them from the excessive Federal regulations that obstruct the development of infrastructure.
The markets may fall off the cliff, but the economy will continue to muddle along at a maintenance level pace. Surprise, China and much of the emerging markets are still growing (more demand tomorrow than today) just at a slower pace. That is quite different that Europe of the USA where we are contracting (less demand tomorrow than today) Together, global growth will be flat to contracting in the near term until Europe and USA put their financial houses in order. BTW, that does not mean borrow and spend more.
Death Cross
When the 50 day moving average crosses the 200 day moving average it is a big deal. Such big deals that the events have names. When the 50 day MA crosses above the 200 day MA it is called a "Golden Cross" and when it crosses below it is called the "Death Cross"
The last Golden Cross was end of June 2009. The last Death Cross was January 2008.
Guess what? EFA and EEM have already produced Death crosses and the SPY, MDY and IWM are all poised to in the next couple of days.
Anyway, take a look.
The last Golden Cross was end of June 2009. The last Death Cross was January 2008.
Guess what? EFA and EEM have already produced Death crosses and the SPY, MDY and IWM are all poised to in the next couple of days.
Anyway, take a look.