Task: "The Market's Top Is as Slippery as the Bottom&qu
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Só um apontamento sobre o Nichols e que é o que o autor aponta ao Hochberg: há vários meses que ele anda a dizer que desta é que é o topo
Por exemplo, esta lengalenga sobre os 1060 no spx já ele repetido nos 1024 e mais abaixo...
Acho que é altura de ele parar e repensar a sua estratégia pois está a bater na mesma tecla e sempre errada já há muito. Se um dia isto descer lá vem ele a dizer "I told you so"...
Está a perder credibilidade a meu ver
Por exemplo, esta lengalenga sobre os 1060 no spx já ele repetido nos 1024 e mais abaixo...
Acho que é altura de ele parar e repensar a sua estratégia pois está a bater na mesma tecla e sempre errada já há muito. Se um dia isto descer lá vem ele a dizer "I told you so"...
Está a perder credibilidade a meu ver
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Task: "The Market's Top Is as Slippery as the Bottom&qu
"The Market's Top Is as Slippery as the Bottom"
By Aaron L. Task
Senior Writer
11/13/2003 06:34 PM EST
"Each day, it seems, the market has a new theme and focus, often running counter to the prior day's trend. Such developments make life difficult for day-traders, but have not deterred myriad market watchers from attempting to pinpoint the market's peak.
This cottage industry of top-calling mirrors the "bottom-pickers" of 2000 and 2001, and is occurring despite the inability of sellers to gain much traction.
After Wednesday's big advance, for example, early declines all but evaporated Thursday afternoon as an earlier-than-expected upside surprise from Dell offset disappointing results from Wal-Mart and some lackluster economic data.
"The market has no memory from day to day and it is not likely a good strategy to extrapolate one day's gains into the next day," observed StreetInsight.com contributor Doug Kass.
In the microcosm, retailers were one of the prime beneficiaries of traders' desire for economically sensitive names earlier in the week (Merrill upgraded several names Wednesday), only to be pummeled Thursday after Wal-Mart's penny shortfall and lackluster guidance, as well as concerns about guidance from Target.
While major averages fell marginally, the S&P Retail Index shed 1.2% Thursday.
Taking the Dog(ma) for a Walk
Among the bearish contingent, a vocal minority, the postbubble Nikkei analogy continues to hold tremendous allure. In a nutshell, the theory is that financial markets (and investors) act in similar patterns in postbubble environments.
Since its March 2000 peak, the Nasdaq Composite has followed a very similar pattern to Japan's Nikkei, which hit its peak on Dec. 31, 1989. Both averages hit significant lows about 2 1/2 years after their peaks and have behaved in a similar manner since then. As noted here, there have been some recent divergences in the pattern but many of those watching the analogy believe it still points to a mid-November peak for U.S. averages.
"If the uncanny Nikkei parallel from the early '90s is going to hold up -- and I think it will -- then we need to be on the lookout for a sucker punch to the solar plexus of the bullish majority," Dave Nichols of 21st Century Alert, which produced the updated chart above, wrote on Nov. 5. "The Nikkei analog lost a whopping 20% in about a month back then, and a corresponding move now in the S&P 500 would take it from 1060 to around 850." (A similar drop would take the Comp to around 1581 from its recent closing high of 1976.)
Earlier this week, Nichols suggested a strong rally above S&P 1060 would nullify the scenario, but declared: "A major decline is now staring us in the face, according to this analog. It's also saying that such a bottom will be a pretty darn good place to get long."
Of course, there are significant divergences between the economies of the U.S. today and Japan in the early 1990s, as well as major differences between policymakers here now vs. there then, as Howard Simons observed in RealMoney.com's columnist conversation.
For those discounting the Nikkei analogy, Steven Hochberg, editor of Elliott Wave International's Short-Term Financial Forecast, has offered an alternative scenario: 1987.
The newsletter writer has observed similar patterns in the S&P 500's ongoing rally from its March lows with the pattern of the Dow from Dec. 31, 1986, to its peak in August 1987. In addition, there're now more than 50 weeks in which there has been a plurality of bullishness in Chartcraft.com's Investors' Intelligence survey, as was the case in 1987, Hochberg noted. The analog is also based on similar wave patterns, he added.
Based on the 1987 analogy, the Elliott Waver targeted Nov. 4 or Nov. 6 as possible high points for the S&P 500. To date, the index has produced a Nov. 3 closing peak of 1059.02 and a Nov. 7 intraday high of 1062.39. (Close enough for government work, to be sure.)
"If the time relationships remain intact, then the S&P's next low should occur on Nov. 20," which would be equivalent to Sept. 8, 1987, for the Dow, Hochberg wrote. "This low would then be followed by a sharp four-day advance to Nov. 26 -- [equivalent to] Sept. 14, 1987 -- and then another decline to a new intraday low on Dec. 4," equating to Sept. 22, 1987. "From this low, a sharp nine-day rally should carry the S&P up to Dec. 16 and then a steep decline thereafter," he continued.
Despite the draconian implications, Hochberg is definitively not expecting/predicting a crash akin to what occurred in October 1987. "Market crashes do not occur near market highs [but] after a period of declining prices, which has yet to happen in any appreciable way," he wrote, noting the Dow was 27 days past its 1987 peak before declines accelerated.
Furthermore, crashes "tend to be generational events" and 1987 certainly qualifies as this generation's crash, Hochberg added. "Having said this, if the analog holds together there could be a severe decline coming in December; we'll call it a 'mini-panic,' for lack of a better word."
Given the market's day-to-day (and intraday) swings, it's hard to imagine accurately predicting its future with such specificity, especially given Hochberg's recent track record. Faithful readers may recall he has repeatedly called market tops in recent months, as reported here on Sept. 12 and May 30.
Similarly, Hochberg (and Elliott Wave) has been quite bearish on gold's intermediate-term prospects, having predicted earlier this year the metal could fall as low as $200 before embarking on a huge rally.
After establishing a seven-year high Wednesday, gold futures traded as high as $398.40 intraday Thursday but faltered to close down 0.2% at $394.30.
"Sentiment measures remain conducive to a gold high near current levels, as does the pattern of eight-year cycle highs," he wrote prior to gold's latest failure to pierce the psychologically important $400 per ounce level. "So the weight of the technical evidence has not changed and our view holds that an important gold peak is near."
Meanwhile, many bears can't seem to cotton why gold and stocks have been running higher in tandem of late. As discussed here, the Fed's "reflationary" policies may be changing the inverse relationship between stocks and gold that investors all became so accustomed to in the 1990s/early 2000s.
This is yet another bit of bearish dogma -- "gold up = bad for stocks" -- that needs re-evaluating, even as folks such as Nichols and Hochberg seem unable or unwilling to change their outlook. "
(in www.realmoney.com)
By Aaron L. Task
Senior Writer
11/13/2003 06:34 PM EST
"Each day, it seems, the market has a new theme and focus, often running counter to the prior day's trend. Such developments make life difficult for day-traders, but have not deterred myriad market watchers from attempting to pinpoint the market's peak.
This cottage industry of top-calling mirrors the "bottom-pickers" of 2000 and 2001, and is occurring despite the inability of sellers to gain much traction.
After Wednesday's big advance, for example, early declines all but evaporated Thursday afternoon as an earlier-than-expected upside surprise from Dell offset disappointing results from Wal-Mart and some lackluster economic data.
"The market has no memory from day to day and it is not likely a good strategy to extrapolate one day's gains into the next day," observed StreetInsight.com contributor Doug Kass.
In the microcosm, retailers were one of the prime beneficiaries of traders' desire for economically sensitive names earlier in the week (Merrill upgraded several names Wednesday), only to be pummeled Thursday after Wal-Mart's penny shortfall and lackluster guidance, as well as concerns about guidance from Target.
While major averages fell marginally, the S&P Retail Index shed 1.2% Thursday.
Taking the Dog(ma) for a Walk
Among the bearish contingent, a vocal minority, the postbubble Nikkei analogy continues to hold tremendous allure. In a nutshell, the theory is that financial markets (and investors) act in similar patterns in postbubble environments.
Since its March 2000 peak, the Nasdaq Composite has followed a very similar pattern to Japan's Nikkei, which hit its peak on Dec. 31, 1989. Both averages hit significant lows about 2 1/2 years after their peaks and have behaved in a similar manner since then. As noted here, there have been some recent divergences in the pattern but many of those watching the analogy believe it still points to a mid-November peak for U.S. averages.
"If the uncanny Nikkei parallel from the early '90s is going to hold up -- and I think it will -- then we need to be on the lookout for a sucker punch to the solar plexus of the bullish majority," Dave Nichols of 21st Century Alert, which produced the updated chart above, wrote on Nov. 5. "The Nikkei analog lost a whopping 20% in about a month back then, and a corresponding move now in the S&P 500 would take it from 1060 to around 850." (A similar drop would take the Comp to around 1581 from its recent closing high of 1976.)
Earlier this week, Nichols suggested a strong rally above S&P 1060 would nullify the scenario, but declared: "A major decline is now staring us in the face, according to this analog. It's also saying that such a bottom will be a pretty darn good place to get long."
Of course, there are significant divergences between the economies of the U.S. today and Japan in the early 1990s, as well as major differences between policymakers here now vs. there then, as Howard Simons observed in RealMoney.com's columnist conversation.
For those discounting the Nikkei analogy, Steven Hochberg, editor of Elliott Wave International's Short-Term Financial Forecast, has offered an alternative scenario: 1987.
The newsletter writer has observed similar patterns in the S&P 500's ongoing rally from its March lows with the pattern of the Dow from Dec. 31, 1986, to its peak in August 1987. In addition, there're now more than 50 weeks in which there has been a plurality of bullishness in Chartcraft.com's Investors' Intelligence survey, as was the case in 1987, Hochberg noted. The analog is also based on similar wave patterns, he added.
Based on the 1987 analogy, the Elliott Waver targeted Nov. 4 or Nov. 6 as possible high points for the S&P 500. To date, the index has produced a Nov. 3 closing peak of 1059.02 and a Nov. 7 intraday high of 1062.39. (Close enough for government work, to be sure.)
"If the time relationships remain intact, then the S&P's next low should occur on Nov. 20," which would be equivalent to Sept. 8, 1987, for the Dow, Hochberg wrote. "This low would then be followed by a sharp four-day advance to Nov. 26 -- [equivalent to] Sept. 14, 1987 -- and then another decline to a new intraday low on Dec. 4," equating to Sept. 22, 1987. "From this low, a sharp nine-day rally should carry the S&P up to Dec. 16 and then a steep decline thereafter," he continued.
Despite the draconian implications, Hochberg is definitively not expecting/predicting a crash akin to what occurred in October 1987. "Market crashes do not occur near market highs [but] after a period of declining prices, which has yet to happen in any appreciable way," he wrote, noting the Dow was 27 days past its 1987 peak before declines accelerated.
Furthermore, crashes "tend to be generational events" and 1987 certainly qualifies as this generation's crash, Hochberg added. "Having said this, if the analog holds together there could be a severe decline coming in December; we'll call it a 'mini-panic,' for lack of a better word."
Given the market's day-to-day (and intraday) swings, it's hard to imagine accurately predicting its future with such specificity, especially given Hochberg's recent track record. Faithful readers may recall he has repeatedly called market tops in recent months, as reported here on Sept. 12 and May 30.
Similarly, Hochberg (and Elliott Wave) has been quite bearish on gold's intermediate-term prospects, having predicted earlier this year the metal could fall as low as $200 before embarking on a huge rally.
After establishing a seven-year high Wednesday, gold futures traded as high as $398.40 intraday Thursday but faltered to close down 0.2% at $394.30.
"Sentiment measures remain conducive to a gold high near current levels, as does the pattern of eight-year cycle highs," he wrote prior to gold's latest failure to pierce the psychologically important $400 per ounce level. "So the weight of the technical evidence has not changed and our view holds that an important gold peak is near."
Meanwhile, many bears can't seem to cotton why gold and stocks have been running higher in tandem of late. As discussed here, the Fed's "reflationary" policies may be changing the inverse relationship between stocks and gold that investors all became so accustomed to in the 1990s/early 2000s.
This is yet another bit of bearish dogma -- "gold up = bad for stocks" -- that needs re-evaluating, even as folks such as Nichols and Hochberg seem unable or unwilling to change their outlook. "
(in www.realmoney.com)
- Anexos
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- Bubble, Bubble ... Toil & Trouble?
The Nasdaq is still following the path of the postbubble Nikkei - task1.gif (15.29 KiB) Visualizado 274 vezes
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- Another Analogy to Worry About
Elliott Waver sees similarities between the S&P and the 1987 Dow - task2.gif (19.33 KiB) Visualizado 279 vezes
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