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CNBC's Erin Burnett's a member of the CFR:
cnbc.com
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Best & Brightest See Rally Ahead
Some of the most astute bears we know have turned bullish in recent weeks, none moreso than Porter Stansberry. Porter was a good six months ahead of the crowd when he read Fannie and Freddie their last rites early in 2008. Although we can’t recall the last time he waxed enthusiastic about stocks, he is doing so now: “The investments you make right now will become the best investment of your entire life,” he asserts in his latest advisory. He sees this as one of the great buying opportunities of the last 30 years.
Bob Hoye is another seer of renown who thinks a turn is at hand, although not a full-blown bull market. In recent years he’s been a bear’s bear, and he’s gotten it right for as long as we can remember. He now thinks equities are building steam for a powerful rally that could carry into 2009: “A [bear rally] amounting to fifty percent of the loss from the May high seems possible,” writes Bob in the November 27 edition of Pivotal Events. That would imply 10,300 for the Dow and 1090 for the S&Ps. (They are currently trading, respectively, for around 8800 and 896). Another favorite of ours, Peter Eliades, sees a bullish correction that could last till April or May. Peter, whose Stockmarket Cycles was recently ranked by Hulbert’s as the top performing newsletter in the country for the first nine months of 2008, says that although the odds are small that the November 21 low will endure, conditions are improving for an intermediate-term rally.
Powerful MACD
And finally, there is our old friend and former PSE options-floor colleague Tom Tankka, a trader who has lived by his wits, and lived well, since we first met him nearly 30 years ago. An e-mail we received from Tom last week took a skeptical view of our recent assertion that the so-far 1200-point rally in the Dow was just one more short squeeze, destined to fizzle out as quickly as those that have preceded it. Tom responded as follows: "A short squeeze, pure and simple? Possibly. But there's one thing you can't ignore on the last low: the huge MACD bullish divergence. It's one of the most powerful MACD patterns I've seen -- and I follow them diligently, as you know. The kicker is, it exists in hundreds and hundreds of stocks that I track, and I have never seen this before. Bottom line: This rally will probably go much further than most think. The test should arrive shortly, as this wave up gets overbought. A shallow pullback should lead to a further squeeze into year end, as I think most are underinvested -- especially the hedgies, who just got done selling for all the redemptions. Also, we aren't that far off in tracking '29: The market dropped 49% off the highs, then rallied back like 40-50% in four months before a very painful 2-1/2 years down. We just dropped about the same, and could be set for a similar bounceback. Stay tuned."
Investor’s ’A-List’
For our part, with the global economy sinking into its deepest bog since the 1930s, we would be astounded if stocks were indeed about to embark on the kind of sustained rally that our friend Porter envisions. However, we think his “A-list” of stocks is a good place to start if you’re seeking relatively value, safety, and long-term returns. The list includes ExxonMobil, Wal-Mart, Microsoft, Johnson & Johnson, AT&T, Chevron, IBM, Pfizer, Cisco, Apple, Verizon, Intel and McDonald’s. These companies are not going out of business any time soon, and, if truth be told, the way they conduct business looks better suited to survival than the methods and policies now being pursued by the U.S. Government.
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