Friday, March 12, 2010

Et tu Brutus?

I got this in the email this morning:

"TrimTabs Investment Research reporting their latest real-time economic data shows US economy is on the road to recovery and attributing the economic rebound mostly to low interest rates and government stimulus."

Really? You guys wrote this in the beginning of February:

"TrimTabs using real-time numbers estimates that job losses for January were 105,000, much higher than Wall Street expectations that the BLS on Friday will report 5,000 January job losses. TrimTabs warns the BLS estimates are highly inaccurate because of incomplete survey data and illogical seasonal adjustments, among other things. Which means government policy, business and investment decisions based on these numbers are useless, and in fact, dangerous."

Here is the blog post for that - Trim Tabs Expects Bomb

The technicals are lousy but the fundamentals are worse. One month, the government is dangerous and the next they get all the credit for the recovery.

All that matters is the specter of lifting the stimulus and that was not covered in the CMT exam.

4 comments:

Normand said...

Trim Tabs. I would not give too much credibility to what these guys are saying.

In 2008, I signed up for a one month trial to their newsletters. Here is a sample of their headlines on certain dates.

April 4, 2008

TrimTabs Data Points Towards an Economic Bottom While BLS Data Points to Accelerating Downturn!

April 15, 2008

Our Indicators Suggest U.S. Economy Pulling Out of Slump.

April 22, 2008

Real-Time Indicators Suggest U.S. Economy Starting to Recover.
Housing Market Bottoming As Inventories Fall and Prices Plummet

May 2, 2008

U.S. Labor Market Much Better Than Wall Street Realizes.

The subscription depending on the products you chose was costing in 2008 between $12,000. and $50,000.

I did not subscribe!

Will said...

Mike, I was curious if you could comment on your experience with gauges of sentiment.

I understand that the market will do what is necessary to trap the most amount of people on the wrong side of the trade, and looking at AAII sentiment, Investor's Intellegence %bears, Nova/Ursa etc these all appear to be at bullish extremes and therefore bearish by contrarian nature. I'm sure after this week, the Investor's Intellegence survey next week will show an even more bullish extreme. In your experience how predictive of a turn are these measures, and what kind of time frame do markets tend to correct after such extremes are hit? Any other thoughts of the subject?

As always, I enjoy reading your publications and hearing your thoughts.

-Will L

Michael Kahn said...

Normand,
Ooofah! Not very good!

Michael Kahn said...

William,
Sentiment indicators are background only and are lousy trade triggers. While the surveys are rather "too bullish" right now they are not at that panicky extreme we saw a year ago.

How long they last? My experience is that once they get to some sort of extreme you then start to look for market signals in price.

But that was when the market was free. Can you taste the cynicism?