De Beursvloer #73: Shorters worden uitgerookt

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Bear-Market Rally or Bull Market Birth?

Thursday, April 2, 2009 - Vol. 11, No. 83

Seven Indicators that Question a Prolonged Rally

By Eric Roseman

For the first time since the advent of the global credit crisis, I bought stocks in early March. Though this was not a major allocation to my portfolio, I suggested that investors with at least a five-year time horizon could begin dollar averaging into the market at these lower levels.

Since hitting another intermittent low on March 9 the S&P 500 Index has now rallied a cumulative 20%.

Of course, this is not the first time stocks have attempted to place a bear market bottom since late 2007. We've already had two such intermittent lows - the last one in late November - and both ended badly for bottom-fishers.


Punching Through the 50-day Moving Average on a Bull Run? Not Likely

I don't subscribe to the view that we're in a new bull market. The Wall Street Journal and other financial newspapers and many analysts now coin this rally a bull market because by definition stocks have gained 20% or more over this period. Once again, mainstream investors have underestimated the depth and magnitude of a credit deflation - an event nobody alive has ever witnessed.

To be sure, and to credit the bludgeoned bulls, several economic indicators have improved lately, including ISM manufacturing data, consumer confidence, retail sales and durable goods. In my view, however, these statistics are coming off very depressed levels and I think we're just in a dead-cat bounce - nothing more.

I've got seven strong reasons why I'm not convinced we're in a bull market:

* The VIX Index or the CBOE Volatility Index, which acts as a fear gauge, remains above 40. I'd be more constructive about stocks and taking market risk if this index fell below 38.50 - an important support level. The fact it remains elevated is a testament to ongoing nervousness among market participants;

* Investment grade corporate credit spreads are still way too high. High quality spreads remain north of four hundred basis points (4%); historically, investment grade spreads have averaged about 130 basis points or 1.3% above Treasury yields, according to PIMCO. This price action bothers me the most because it suggests the safest credits aren't rallying and, instead, remain near their mid-September crash peak;

* REITs are not rallying along with the stock market. Fear is rising in the real estate sector with commercial loans next on the chopping block for banks. Some of the biggest REITs, like General Growth Properties (NYSE-GGP) are struggling to raise financing. REITs are down 33% this year and have posted only a modest 10% rally since March 9;

* The Baltic Dry Index, which measures bulk cargo rates for shipping commodities, skyrocketed off its lows last fall and then peaked a few weeks ago. This index is now down 32% since peaking in March - indicating that trade flows are deteriorating sharply;

* Gold. Despite a decline of $118 an ounce off its highs, you'd expect gold prices to be much lower if the bulls were really in control. If the reflation theme is back or the re-emergence of higher inflation accompanied by the acceleration of bank credit and money printing, then why hasn't gold rallied along with stocks? This is a bad sign that deflation, not inflation, is currently in control of the markets. Rising stocks mean rising corporate earnings and therefore cost-push inflation. Yet this is not what gold is telling us now;

* Small-cap stocks are lagging since mid-March - an anomaly in the context of bull market rallies. If stocks were truly putting in a bottom then smaller stocks would generally lead the market; small stocks have indeed gained over 23% since the March 9 low but are essentially flat since March 18 and now lagging the broader market over the last several trading sessions;

* The U.S. dollar should be declining much faster as stocks rally. If the bear market was truly over then more dollars would be sold to increase risk and leverage bets in global markets. But that's not really happening. Despite the dollar's big correction two weeks ago, it has modestly recovered, which signals the Fed has not entirely created enough liquidity to flood the system with cash. This is a deflationary sign, and it's not bullish.

If you feel compelled to buy into this rally I would suggest focusing on income-producing securities like high quality short-term corporate debt, Treasury bonds and TIPS. Convertible bonds are safer than stocks but will also decline if the market rolls over. I would not lunge after stocks at these levels.

This is still a bear market and, worse, credit remains largely unavailable for many segments of the economy, including consumers and businesses.

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za 04 apr 2009, 06:00
AEX nog niet rijp voor lange termijn rally
Beurs kan verder omhoog, maar…

AMSTERDAM - Nu de AEX door de 227-grens is gebroken, is de lange termijn dalende trend achter de rug, maar zal de index zich de komende maanden zijwaarts gaan bewegen. Pas als deze fase achter de rug is, en dat kán lang duren, is de graadmeter rijp voor een echte langdurige stijging.” Dat stelde technisch analist Royce Tostrams tijdens het DFT-seminar ’Beleggen, begrijpt u het nog?’.

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Op zondag 5 april 2009 15:21 schreef Oizno het volgende:
http://www.dekritischebel(...)stuwen-aex-naar-280/

Komende week een daling met dan een voorlopige bodem. Daarna doorstijgen naar 280 punten. Daarna afglijden naar 180 punten.

Wat denken jullie?

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Op zondag 5 april 2009 16:56 schreef Dinosaur_Sr het volgende:

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hij had de grafiek ondersteboven

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Bulls face a challenging week

The Dow's best stretch since the 1930s could hit some resistance in a holiday-shortened week.

April 4, 2009: 5:25 PM ET

NEW YORK (CNNMoney.com) -- As Wall Street comes off its best four-week run since the 1930s, investors are getting a bit more confident about the longevity of the current rally. But should they be?

After hitting 12-year lows, the major gauges have risen for four weeks straight, with the Dow surging 21.5%, its best four-week run since 1933, when it gained 31%.

"I feel like we're setting up a real generational low, whether we've seen it or are near it," said said John Wilson, chief technical strategist at Morgan Keegan. "But I would expect the market to do some backing and filling over the next six to eight weeks as we get through the bad earnings."

How the stock market reacts to the financial results will be critical, he said. Dow component Alcoa announces results on Tuesday, but reports don't start pouring in earnest until later in the month.

This week is something of a pregnant pause for investors, with no first-tier economic reports on tap and trading limited to four days because of the holidays.

Passover is on Thursday, and many celebrations begin the night before. Although financial markets are open both Wednesday and Thursday, attendance could be lower. Attendance is expected to be especially light on Thursday, ahead of Good Friday, when all financial markets are closed.

April is typically a strong month on Wall Street except during bear markets. According to the Stock Trader's Almanac, it has been the Dow's best month since 1950, for an average gain of 1.9%. But during bear markets, April tends to be a down month, according to the Almanac.
On the docket

Tuesday: Consumer borrowing costs are expected to have fallen by 1.5% in February, according to a Briefing.com survey of economists. Costs showed a surprise jump of 1.8% in January. The consumer credit report from the Federal Reserve is due out at around 2:00 p.m. ET.

Alcoa (AA, Fortune 500), as per usual, is the first Dow component to report quarterly results. The aluminum maker is expected to have lost 57 cents per share, according to analysts surveyed by First Call. Alcoa earned 44 cents per share in the same quarter a year ago. The report is due after the market close.

Wednesday: The February wholesale inventories report is due in the morning from the Commerce Department. Inventories are expected to have plunged for the sixth consecutive month, falling 0.6% after falling 0.7% in January.

The weekly crude inventories report from the Energy Information Administration is due in the morning.

Passover begins at sundown.

Thursday: March sales from the nation's retailers are due throughout the month. In February, sales at discounters such as Wal-Mart Stores helped sales overall to rise, following four straight months of declines. This month, investors will be looking to see if the consumer is continuing to hang in despite the recession.

The February trade balance from the Commerce Department is due in the morning. The trade gap is expected to have widened to $36.5 billion in the month from $36 billion in January, a six-year low.

Also on Thursday, the government releases the weekly jobless claims report and the March report on import and export prices.

Friday: All financial markets are closed for Good Friday.

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As Dow rises, what did you learn from the fall?

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Op zondag 5 april 2009 17:32 schreef edwinh het volgende:
http://www.forexrazor.com/Home/ItemID/90/Default.aspx

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Op maandag 6 april 2009 08:36 schreef Lemans24 het volgende:
Wordt toch weer eens tijd voor een flinke daling.

Ik heb veel te snel verkocht en mis zowat de hele rally, die maar door en door en door gaat.
[..]

Wie gaat er shorts aanschaffen?

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Duitse overheid wil Hypo Re nationaliseren - media
06-04-2009 08:12:00

AMSTERDAM (Dow Jones)--De Duitse overheid wil de geplaagde hypotheekverstrekker Hypo Real Estate Holding AG overnemen, zo meldde de Financial Times (FT) dit weekend zonder bronnen te noemen.

Er zou begin deze week al een bod kunnen komen. Volgens de berichtgeving zouden aandeelhouders van Hypo Re hun stukken kunnen verkopen voor EUR1,26 per aandeel.

Hoewel de Duitse overheid alle aandelen zou willen overnemen, zal het bod vermoedelijk niet leiden tot een volledige overname. De grootste aandeelhouder van Hypo Re, private equity bedrijf J.C. Flowers, zal het bod vermoedelijk afwijzen, schrijft FT.

Het is wel mogelijk dat de Duitse overheid een meerderheidsbelang verkrijgt, aldus de krant.

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Verrassende koersrally
Beurzen stijgen en dalen, de koersrally van de afgelopen week laat zich als verrassend betitelen. Waarnemers wijzen naar het ‘succes’ van de G20 top als oorzaak. Leuk geprobeerd, maar de uitkomst van die top geldt als wassen neus. Ook zou de economie de eerste voorzichtige signalen laten zien dat er sprake is van een herstel. Ook hier geldt: leuk geprobeerd. Lichtpuntjes waren er de afgelopen week, maar die konden de weken hiervoor ook al worden waargenomen. Het is maar net waar en wanneer de financiële markten besluiten dat het glas halfvol is. Het is vooral een kwestie van een veranderde perceptie en niet zozeer van een fundamenteel verbeterde omgeving.