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Strategies & Market Trends : Stock Attack II - A Complete Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Paul Shread who wrote (52161)	8/29/2006 4:20:35 PM
From: dennis michael patterson	Respond to of 52237

Well, I don't get it. I would have thought those words -- plus the crowded trade -- augered a pullback. Somebody must have bought loads of putz and didn't get what s/he expected

To: Paul Shread who wrote (52161)	9/1/2006 2:29:12 PM
From: dennis michael patterson	Respond to of 52237

Bears are always SO rigorous! Case in point (and this guy is VERY smart): nvesting Bears Have Fight Left By Doug Kass 8/31/2006 Surprisingly (at least to me), the market averages appear to be headed toward their second best month of the year, experiencing higher returns in 10 out of the last 11 months (a streak that even New York Yankee shortstop Derek Jeter would admire). Meanwhile, on the fundamental front, the rate of growth in economic activity continues to moderate. Even the Federal Reserve is recognizing this development, as evidenced by its pause this month. Despite protestations from a number of corners, retail activity shows signs of weakness. The consumer's overconsumption binge is growing long in the tooth, as his levered balance sheet (increasingly reliant on the appreciation of homes and equities) is being weighed down by not only the impact of 17 tightenings, but also by the speculative air being taken out of the housing bubble. Same-stores sales (especially in real terms and adjusted for the recently rising apparel inflation) reported last night and this morning are proof positive of a slowdown that, coupled with plummeting consumer confidence, is almost impossible to ignore. Moreover, as reported recently, real median wages are showing no signs of improvement, and with the probable reduction in construction-related jobs in the months to come, job growth will likely disappoint. The hard landing of real estate has only begun to be felt, as the downturn is still less than a year old and new housing starts have dropped by only about 15% from their fall 2005 peak. In past down cycles, the duration of the downturn has been between 25 and 52 months, and in terms of unit declines has averaged approximately 52% from peak to trough. So, stated simply, the worst is yet to come for housing, and with it, the typical adverse multiplier effect on the rest of the economy. For now, the market's technicals belie the fundamental direction of the economic contraction and the likely drop in corporate profit margins (which should lead to revisions in corporate profitability in late 2006 and for 2007). Sentiment, as Gary "The Other" Smith points out repeatedly, remains poor (a residue of the May-June swoon) and has buoyed equities this summer. While it can be argued that the impressive rise from the June lows has now contributed to a growing complacency among market participants, the bulls remain very much in command. But the market, as we have recently observed, is a fickle temptress, and ignoring the rising economic and corporate profit threats might turn out to be injurious to one's financial health. In the face of a clear pattern of upside momentum I remain steadfastly bearish (and bruised!) -- and I continue to fight the "good" fight.