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Technology Stocks : Applied Materials No-Politics Thread (AMAT) -- Ignore unavailable to you. Want to Upgrade?

To: Kirk © who wrote (5738)	2/26/2003 11:33:34 AM
From: chomolungma	Respond to of 25522

Kirk, I don't think the fact that the confidence/expectations numbers are leading indicators argues against them being used as a contrary indicator for the stock market. When used as an indicator for the economy, the DIRECTION is all that matters. If the index starts to move up, it's viewed as a precursor to better economic activity. When used as a contrary indicator like your link does, the LEVEL is what is being considered. This is like the contrary Bull/Bear numbers which depend on the level of bearishness being a contrary indicator to the stock market. It does not surprise me that extreme levels of pessimism indicate an upcoming rally.

To: Kirk © who wrote (5738)	2/26/2003 8:00:15 PM
From: Sam Citron	Read Replies (1) \| Respond to of 25522

Your Suite101 chart of consumer expectations suggests that we are in the "extreme pessimism" zone [your labels] at around 65, where you infer that a new bull market may be near. [please correct me, if I am misinterpreting] In contrast, a much longer term chart of the broader consumer confidence and consumer sentiment indicators at ttrader.com seems to suggest we may face considerable deterioration to reach levels that prevailed in 1990-91, 1982, 1980, or 1974. (1) How would you reconcile this divergence between consumer expectations (as shown by your chart) and the broader confidence and sentiment numbers (as shown on the other chart)? (2) Do you focus on the expectation component because you think it is the more important indicator in terms of forecasting the market? (3) Does the stock market lead consumer expectations, or is it the other way around? Sam