Thread: Market Talk

To date, 341 companies in the S&P 500 have released results, 68% of which exceeded analyst expectations. Historically, 59% of the companies beat forecasts. This week 82 companies in the index are expected to report. With a majority of results already in, the third quarter remains on track to grow 16% from the same period a year ago. This marks 14 consecutive quarters (which is a record) where S&P 500 companies have shown double digit earnings growth. This is the kind of growth a bull market should thrive on. Gregg - tell me it isn't so. Help me keep my feet on the ground.

Dennis - perma bull #2

Would it be possible or plausible that the Fed noticed that the core consumer prices increased at a 1.3% rate in the third quarter, down from 1.7% in the second quarter? Or will they just ignore those results for the benefit of proceeding to neutrality? Bernanke is the man - if anyone can do it he can! I know the GDP price deflator was up at a 3.1% annual rate vs a 2.6% annual rate in the second quarter, but perhaps this is temporary. I also think the ISM index will hold the September value of 59.4% and not show weakness of 57.5% which is consensus. Turn the bull loose.

Dennis,

Your post begs the question - why hasn't the S&P500 taken off? Are expectations so highthat the 500companies mustcontinue to beat expectations every quarter just to tread water or are buyers still afraid of another 2000-2002, or....?

Pete 1,

The S&P 500 has been in an underperformance mode for the last 5 years, while the R2K has been in an outperformance mode for the last 7 years - everything in life follows certain cycles and those cycles by nature will change. Over the past 5 years large growth stocks have declined 15.5% a year, while small-cap value stocks have risen 18.4%. That's just a phenomenal performance differential. I'm in the C fund at 100% with my contributions dollar cost averaging at nice pricing - I can wait as long as I have to inorder to accumulate shares until the market recognizes that the S&P 500 is now a value play. The next leg of this bull market may run the C fund up to the $16.00 mark - if that happens I continue to buy all the way up. There will be a 1700 value on the S&P 500 index in the future. I just need to maintain the discipline of my conviction.

Pete1

are buyers still afraid of another 2000-2002, or....?

I think you are correct Pete1... Investors do remember! I talk to people at work all the time that comment they will never get back in the stock market.... Some have had it for this year and have thrown in the towel. I also think the big money wants to see a clear trend/break-out to the up side before they ride the BULL again!!!!!The economics say BUY the marketit's cheap, the Technicals say Caution. I think the market rallies some more from here, but one more pull-back is very possible.....I would like to see the rally, but another pull-back is just another buying op for me.... I do agree with Dennis the Bull is getting ready to run, but the Fed and consumer sentimentare the one's to watch from here!!!!

I just checked the web sites of 2of the Tech's I follow for weekend updates, andboth are shorting the market.My TSP money is in cash, butVanguard account'sare always fully invested. But shorting the market I think is more dangerous than being in cash right now.... It will be interesting to see if they get squeezed next weekif the market rallies.... Fasten your seat belts for next week!!!

The next three charts demonstrate that each of the major indices stopped on Friday just below important resistance. For the S&P 500 it was the 200-day moving average. The index has now closed between 1176.84 and 1199.10 every day of the last 18 since October 5. Based on past performances, the breakout from this 1.9% trading range will traverse at least as many points above or below the extreme of the trading range that it penetrates, in the course of the week following penetration.


The NASDAQ rally stopped just over 2 points below the pivotal 2092 resistance level that has turned it back several times this year as it came up from below.



And the Dow was stopped by the downtrend line drawn through three recent highs.

Robo,

I would surmise that Mr Brinker is probably 200% long right about now.

Dennis

Here is a point...

Usually when support or resistence is tested 3 times it gets weak and is broken.
like beating on a door...:^
We have been over the magic 1200 mark inter day 2 times last week...

MAYBE the 3 time is charm !

Skip

Dennis,

He sure is, and he thinks the market is in good shape!!! He is still recommending adding new shares under 1180 in the S&P and holding!!!! I'm listening to him right now... I follow his investment principles on some of my mutual fund accounts, dollar cost averaging,in the total stock market....

Lots of people calling in about I Bonds.... The new rate is going to be around 6.5%!!!

That is a reallysweet deal in todays returns for fixed income...

We still need to close above 1200 and a break out of 1205 for a good run...

We still have the 4qt run... Let it be...

Skip

Skip wrote,

Usually when support or resistence is tested 3 times it gets weak and is broken.

I agree, I think the 1200 level gets busted next week, but the rest of the indexes need to follow suit, and the 1200-1210 needs to hold for support.... Still lots of big money NOT convinced this is the REAL BREAK-OUT AND WILL NOT PLAY UNTIL THE TECHNICALS LINE UP..... Who knows, next week could be it.............Some of the shorts have already went to cash and some have added long postions... I sold into the rally Friday, but wanted to lock in some more gains... It has been a tough year and I want to keep my small single digit YTD returns.THE QQQ's is a problem....