T2W Bot

Staff member
1,496 115
In my view, we are still in a secular bear market and currently at a point of extremely high risk. We
have now passed the period of seasonal strength for the year – a time when spirits are high and the
market performs better than at any other time on a historic basis. A study in the December 2002
issue of the American Economic Review reported that the average stock market returns from
Halloween through May Day (the so-called "winter months") were significantly higher than equity
returns from May Day through Halloween (the "summer months"). The findings were that the
summer months’ returns have averaged so much less than those of the winter months that almost
all of the stock market’s long-term returns have been produced during the winter months. The
obvious implication is that simply going to cash between May Day and Halloween will have only
minor impact on long-term returns while dramatically reducing risk.
I was going to change the above barometric-like message...

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joeph

Newbie
6 0
Hi Mr. Garret.

I can't agree more with your thoughts on the current market.
The higher it goes, the higher the risk of a Sizable Crash in my view.

The reason for Crash is countless, the reason to go up further are only a few.

Some of my point to Go up more:

1. Momentum is extremely strong and this might help the indices propel to
higher levels, only to mislead even more market players.

2. The FED and the government will support the market at any cost, before the
election. They will buy treasuries, and anything to keep the net worth of the
average American at a higher level along with their optimizm.

3. If the Dollar crashes or fallw much further, than it will have another positive
effect on the incides, especially the NASDAQ100 and S&P100 wich is full of Big
Multinationals, so when they convert their profit to dollars it will be show nice
results.


The Negatives are countless:

1. During the past 4 weeks, the NASDAQ100 moved up more, than any time
during the past 6 Years. Biggest Green Up candle on the monthly Chart, When
- Government debt is totally out of control.
- Unemployment is Extremely high, bigger than any time in the past 20+ years.
- Housing is far from being out of the woods, actually further price erosion /
wealth-decline is probably in the cards.
- Consumers not consuming that recklessly any more, they are scared and
paying down debt as soon as they can.

2. Creadit is still contractin at an alarming level.

3. The Small players (S&P600) did not folow the Big indices (S&P500,
NASDAQ100, S&P100). The S&P600 index was not broken out to the upside,
and this might be another reason to be cautios, or even a red flag going
forward.

4. It was logical to see Gold at extremely low levels, when the Stock market was
flying very high during the nineties. Now the Stock market is Flying again,
but Gold investors, who are usually the more conservative, and really smart
players, not validating that view, pushing prices through the roof. Gold
touched 1300 this week.

5. It is clear, that this rally is the rally of the Huge Cap. Even within the huge
cap, some of the outsized gainers came from: AAPL, ORCL, AMZN.
If we look at the monthly chart of Apple, AAPL, which is a great company, but
only a gadget maker, than we might understand this crasiness.
At AAPL, every employee worth more than 8, 000 000 $ (Eight million dollars),
If we divide the Cap of the company by the number of employees.
Everybody included in this calculation, the receptionist, the security guards,
the office secretaries...
This is more than anything I have seen, even during the 2000 Bubble. It is less
than 2 million $ / employee at Intel....

6. Some of the Cycle works point to lower levels. ( 2 Years Cycle, 4 years Cycle,
120 Years Cycle...)
I don't consider these major factors, as their effect might shift too much to
left or right, out of exact cycle tops / bottoms, but their overall effect
definitelly will be felt sooner than later.

7. Market PE is supposedly Low. It is Bull****. If we take out the Banks, market
PE will quickly become big.
During the big depression of the 30-s, the minimum market PE was well below

8. Even with all these negatives, we at predictionwizard predict a bit Bullish
market behavior for the week, starting Sept 27.
But the big question, How long will this go? Is still mistery.

As You mentioned, wiht these manipulations (I strongly believe, we are
witnessing great market manipulation!) it could go on for weeks or even for a
few month, but sooner or later the Valuations will return to earth and teh
market will be hit by the reality after the daydreaming.


Joe Papczun
 
 
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