Valor a que a banca avalia as casas sobe mais 20 euros para novo recorde

[Surfer]

We have been criticized at times from viewers that believe we rely too much on the fundamentals and don’t rely enough on technical analysis. Actually, we have just as much confidence in technical analysis as we do in fundamental analysis. As stated in the last comment, we were surprised to see the S&P 500 breakout above the resistance of 1015 and respect the warning Mr. Market seems to be flashing. As also stated in that comment we sincerely believe that this will turn out to be a false breakout.
With that said, we still don’t believe we are remotely close to the beginning of a new bull market. The respect we have to give to the breakout forces us to cover any shorts that are also breaking out through resistance levels with increased volume and continue to monitor any positions that have unlimited loss potential. As mentioned above, our highest probability is that this breakout is Mr. Market’s way of drawing anyone into equities that is worried about missing the next leg of a new bull market. Markets work in the perverse way of figuring out what it will take to entice the most amount of people into playing the game. Once it gets the “suckers” in, it then continues on the path of least resistance which, in our opinion, is down. However, we also know just how ludicrous the market can get by witnessing the late 1990s and beginning of 2000. Remember, the NASDAQ doubled from October of 1999 to March of 2000. It is because of this that we don’t short aggressively after technical breakouts.

Even as we attempt to get out of the way of markets like this, we are more convinced than ever that the stock market will sell at much lower levels than exist presently. The strategy is really one of making sure we have the resources to benefit from the eventual market decline that we believe will be as much as 50% to 60% from this level and will almost certainly drop by at least 40%.

We are attaching a chart we have used many times before to show the 78-year history of the S&P 500 P/E ratios showing the results after major bull markets and major bear markets. We also visited the website of the S&P to get the latest estimates of earnings and dividends. We can’t conceive of this market avoiding a final collapse from the speculative debt related mania to a level where the P/E declines to under 10 on reported earnings--and the dividend yield reaches levels at least double the present 1.6%. The latest estimated earnings by the S&P analysts for 2003 are $43.72 and $53.60 in 2004 while the latest 12 months are $34.75. Dividends are expected to be $16.80 in ’03 and $18.50 in ’04. That puts the P/E for 2003 at 23.5 and the P/E for 2004 at 19 while the P/E on the latest 12 months is just under 30.

The economy is coming in with numbers that are better than expected like durable goods today and auto sales (although the strength was from abroad) and productivity. The productivity numbers we believe reflect the layoffs rather than the work force producing more goods. The employment situation continues to deteriorate as the unemployment insurance claims rose unexpectedly to 413,000, bringing the 4-week moving average over 400,000.

Now that mortgage refinancing has been basically shut off (due the rising rates) and tax cuts working only temporarily, we need to get capital expenditures on plant and hiring of new employees to expect a self-sustained recovery. The Challenger & Gray layoff numbers were released this week and although they were about 80,000 a representative of Challenger put a positive spin on them since they were an improvement over the past couple of years. We don’t look at numbers such as those as a positive, and we are still not at all convinced that this recovery won’t be as disappointing as the last few false moves.

In fact, we feel that this economy correlates pretty closely to Japan where there were profit bulges and GDP spikes periodically during their 13-year bear market and financial malaise. We have also attached a chart of the Nikkei, which our regular readers have seen before, showing many stock market rallies within that overall bear market.

views of Comstock Partners,Inc