Lance Roberts, Things To Ponder: Shades Or Umbrella

Lance Roberts, Things To Ponder: Shades Or Umbrella

Since the beginning of this year the markets have primarily treaded water. The primary support for the bulls has been continued acknowledgement by the Fed on an inability to remove accommodative policy by raising interest rates. (Which should make you question what happens the first time they do.) The bears have been feasting on weak economic data and deteriorating fundamentals. As I discussed before:

#“While the rally this week was nice, it failed to break back above resistance which it needs to do to reestablish the bullish trend. Currently, the markets have held the long-term bullish trend line that has remained intact since December of 2012 with two successful tests over the past month. That is bullish for now and indicates buyers are still in the market. However, there is a BATTLE being waged between the bulls and the bears as prices have continued to deteriorate from early-year highs. That battle should be resolved soon, and for now the bears have the advantage”

Earlier this week, I posted an analysis of various charts to allow investors to answer the question of “bullish or bearish” for themselves. I suggested that:

“In a recent study of forecasting, it was determined that ‘weathermen’ were the most accurate forecasters three days into the future. The reason to watch weather forecasts is to gauge the possibility of needing an umbrella. However, it is interesting that financial media/analysts never forecasts rain even though ‘showers’happen on a fairly consistent basis. Investors, like weather forecasters, should pay close attention to the weather. The technical deterioration, like a storm front approaching, suggests that it is currently ‘cloudy with a strong chance of rain.’ As an investor, action should be taken to be prepared to REACT if it does rain. In other words, if we think it MIGHT rain we take an umbrella with us, it doesn’t mean that we walk around with it open.”

This weekend’s reading list covers the predictions and forecasts for investors. Is the forecast for a future “so bright I gotta wear shades,” or should we be grabbing an umbrella?

CNBC
1)Don’t Let Hypoxia Crash Your Retirement

; “The hot air created some turbulence so I headed toward 12,000 feet, higher than I had ever flown before. I was euphoric, I could see all the way across Lake Michigan. This was really cool! All of a sudden a mental alarm bell went off, I am euphoric, a major warning sign. Every private pilot learns about hypoxia in ground school. Hypoxia is a pathological condition in which the body or a region of the body is deprived of an adequate oxygen supply. Just a year ago, there were many articles, such this one from USA Today, telling investors the stock market had surpassed 1,000 days without so much as a 10% correction. A correction normally occurs every 18 months on average. A year later we continue to see the market soar even higher, 1,300 days and counting. Rarefied air? Check!”

Marketwatch

and

Fundreference
2)If The Economy Is Better, Why Aren’t Stocks

; “The single best measure of the relative state of the U.S. economy when it is experiencing some degree distress is perhaps the number of publicly-traded U.S. companies that announce they are cutting their dividends each month. Through 12 June 2015, that indicator suggests that the U.S. economy has taken a positive turn beginning in May 2015, which we can confirm because the cumulative number of dividend-cutting firms in the U.S. in the second quarter of 2015 is now coming in quite a bit lower than the pace that was established in the first quarter, which experienced negative GDP growth”…

Politicalcalculations

and

Yardeni
3)Who Gives A #*&$@%^?!

; “Seemingly, on a daily basis, some economist, strategist, analyst, or talking head pundit on TV articulately explains how the financial markets can fall off the face of the earth. Unfortunately, there is a problem with this type of analysis, if your evaluation is solely based upon listening to media outlets. Bottom line is you can always find a reason to sell your investments if you listen to the so-called experts. I made this precise point a few years ago when I highlighted the near tripling in stock prices despite the barrage of bad news”…

Investingcaffeine

and

Hussmanfunds
4)In Search Of A Stock Market Bubble

; “Anyway, as usual, there is a lot of talk of the market being insanely overvalued, median P/E’s at post war records and all the usual. I look at the charts and some are scary, but I still don’t get the sense of a bubble. I’ve seen the Japan bubble in 1989, the 2000 internet bubble and some others. I see the Chinese bubble going on right now. But I still don’t really get the sense that the U.S. stock market is in a bubble. Yes, there is a pocket of bubbliness, like in some parts of the tech sector (social networks, biotech etc.), but overall I just really don’t see it”…

Brooklyninvestor

and

Commonsense
5)Why The Ghost Of 1937 Is Haunting The Fed and Market

; “In 1937, the Hindenburg exploded and swing cats were doing The Big Apple. That year also marks the last time the Federal Reserve hiked interest rates from zero, and what followed wasn’t pretty: a severe recession and a 49% collapse for the Dow industrials. Bank of America Merrill Lynch was among those chattering about 1937 parallels in a recent note, with a not-so-easy-on-the-eyes chart of that stock fallout way back when”…

Marketwatch

and

247wallst

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Lance Roberts, Things To Ponder: Shades Or Umbrella

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