... and further, Cheryl ... "Ken Wilson says - in his usual arrogant manner" ... I also subscribe to the famed Dow Theorist, Richard Russell ... who, yesterday said ...
"News: Midwest manufacturing fell at a faster pace than they thought it would. The Chicago purchasing managers index dropped to 41.1 from 46.2 the preceding month. That was the 14th month under 50 -- anything below 50 means a decline in manufacturing.
As for layoffs, mass layoff climbed again in October -- a mass layoff involves a least 50 people losing their jobs for a month or more. There were 1,316 mass layoffs in September which involved 158,000 people. There were 1,186 mass layoffs in October involving 212,00 workers. We'll just have to see what November brought.
In the meantime, Fed Chairman Greenspan said that the reason the dollar is stronger than the euro is America's superior productivity (Greenie is still obsessed with productivity, he's been talking about it for years). And by the way, the dollar weakened noticeably last week.
Here's a new one -- Merrill ousted its chief strategist for US stocks last week. The strategist had predicted that stocks would be up 20% this year, when unfortunately they were down. Ever hear of an analyst being fired by a brokerage house because he or she was too bullish?
Speaking of bullish, Nancy Lazar (interviewed in Barron's this week) joins the growing chorus of analysts who are saying that the recession is nearing its end. Says Ms. Lazar, "This is a classic end-of-recession rally in the stock market." I have a lot of respect for ISI's Ms. Lazar, but I don't agree with her.
What makes a "classic end-of-recession rally"? Damned if I know. How about the many rallies of 1929 to 1932 or 1966 to 1974. A lot of those rallies looked much more powerful than the rally from this year's September lows -- in fact MOST of them looked better than this one.
Aw, I'll just add this. If this recession and this bear market is over, if will have been predicted by the great majority of analysts -- the same analysts who never saw the recession coming in the first place. And I'll add -- if this recession and bear market is over, it will be the first time that a bear market ended with VALUES still sky-high and with the public still bullish and buying stocks. |
