Monday, December 15, 2008

Personal Capitulation?

They say that bear markets end when everyone is sick of stocks and would rather go to the dentist than their broker. By then, the bears have ground everyone down and portfolios lay decimated in the financial waste that once was a bull market.

Here is a twist. As a financial markets journalist, I am getting a tad sick of things now.

What's that, Mikey, you don't like your job?

Far from it. Writing about the markets and panning for golden nuggets of insight from the river of data is still fascinating. What is getting to be old hat is coming up with the same conclusions.

Yes, its a crappy market.
No, our tools still don't work the way we are used to them working.
Yes, I see a bear market rally forming.
No, that does not mean it is entirely safe to play in the market.
Yes, interest rates that are near zero - and below zero at one point last week - tell us things are as far from normal as anyone alive today, er, anyone under 100, has ever seen.

and on and on and on....

How many times can I say the same thing? How many times can you the reader read the same thing? That's why I am trying to find stocks that are diamonds in the rough that is today's market. Today's column was on biotech but while there were some candidates looking ripe there were many more that looked sad. But how many do we need to make this holiday season a little brighter? One or two works for me.

Making hay when the sun shines. Lemonade from lemons. Yadda yadda.

My feeling is that I want to be ready when this market surprises the heck out of us with another monster rally. That's a lot better than throwing a shoe at it as I chase it higher.

5 comments:

paulocuana said...

What I've been hearing for some time is, "Stocks are priced for a recession and Bonds are priced for a depression." That's what I would like to see in a column, the technical analysis of corporate debt, particularly the high yield market.

How about it Michael, are you taking requests?

As always, Best Wishes.

Paul

Art Lamstein said...

This is a very deceptive market. Anyone who calls this market is Nostradamus reborn or a faker. How many times have we thought a trend has started, wave 4, and been burned. There is a good chance we are still in wave 3 down. Since late November we are in a narrow trading range triangle. Charting is not necessarily predictive until you see the trend or the wave pattern. I think the market is going down too, but I don't know if it starts tomorrow, or after a run up into the mid 900s. I think it could go down because we have not had capitulation yet, as you say. Rallies have been week in volume and breadth, and vix is still relatively high. Elliotwave has 11 patterns that they say are possible on the S&P 500. If it goes down, how far? When it hits bottom is it a U or V patten? There are so many "advisors" who only call the mid-trend and so admit they cannot time the market. That's ok. They are not really cheating anyone. I am not talking about you, just in general. You are asking yourself, is that all there is? Well, if you do better than the average type that you compare yourself to, or if you set your own standards and are true to them, then you don't have to answer to anyone. But I accept your capitulation as an indicator that we are close to mass capitulation and the end of the down leg of this bear market.

Quick Takes Pro said...

Paul,

I actually did something on corporates a few weeks ago and while generally correct it did not make much money.

Otherwise, the corporate market is rather diverse - like stocks - but there are few liquid tradables that cover the "market" for charting. My data provider is light on coverage to say the least.

Quick Takes Pro said...

Art,

Well said.

At the end of the last bear market when I was editor for the Market Technicians Association newsletter I put a picture of a giant growling grizzly on the cover with the caption "Oh, no, I'm a contrary indicator."

patrick neid said...

Well the good news is historically the market will go dead from this Friday until January 5th. Take a break.

Now you do realize that if you do take a break this will then be the most active two weeks in xmas history!