Thursday, September 16, 2010

Modern Day Depression

This was the headline in an article in Advisor Perspectives by David Rosenberg, Chief Economist of Investment Advisor Gluskin Sheff

He wrote:

The bottom line is that when we get to single-digit P/E multiples and a 5-6% dividend yield, we will be at levels that will touch off a new secular bull market and we are more than prepared for that eventuality. At that point, sentiment will be completely washed out, as it was in 1982, all the cheerleaders who failed to see the 2007-08 collapse and the new paradigm of frugality will be out of a job, and political change will have occurred.

Does not look like we are there quite yet.


William said...

I think a serious route is going to start within days, the top may have been put in already. 5-DMA McClellan is at the 1 standard deviation mark, typically you see corrections start in this area. A completed and perfected TD-Sell Setup was completed on the 9-14 close, and is still open and valid. The put/call ratio has swung hard to the call side today. So speculators did not believe in the entire rally until the last few days. We are seeing an year long extreme being reached in the 10-DMA TRIN index. This all occuring while the new AAII is showing the most bulls/fewest bears since late December, January 09, the Dow came down almost 1,000 points immediately after. The next closest reading was April 15, right before the highs.

patrick neid said...

It can't come soon enough. I'm not talking about a bear market or lower prices but more what they would represent--sobriety, commonsense and a generational gap before the next bubble.