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Strategies & Market Trends : Buy and Sell Signals, and Other Market Perspectives -- Ignore unavailable to you. Want to Upgrade?

To: GROUND ZERO™ who wrote (29500)	3/5/2012 2:41:45 PM
From: Lazarus	Read Replies (1) \| Respond to of 223667

shorts want the market down to cover... and longs want the market down to go longer.... would not surprise me to see your signal NOT confirmed today as the VIX looks like it may roll over here. but that's just my guess and i kinda fly by the seat of my pants :) Oh... and RUT likes it may be bouncing here.

To: GROUND ZERO™ who wrote (29500)	3/6/2012 11:45:07 AM
From: Jopps	Read Replies (3) \| Respond to of 223667

Hi GZ, Very sorry for the late reply. Between school and my time sink of a girlfriend, the hours can slip away from me. No, my model does not require confirmation, it is much simpler than that. I look at the Value Line Geometric Average (show the change in price of the average stock on the NYSE). 11 straight days (something I back-tested) of decline signals a sell signal. It's indicative of a weakening market. My long term New Hi- New Lo (looks at recent highs in the market over the last 99 days) is still positive, so I'm expecting a correction, not a bear market. And of course, I definitely pay attention to your signal as well. I'm not a technical guru like some here so I also rely on information I can understand. I was reading Hussman earlier yesterday and there were a few gems in his semi-annual report (http://hussmanfunds.com/pdf/sar1211.pdf) Starting on Page 6, Present Conditions: Recent quarters have been largely characterized by a fragile underlying global economy coupled with a persistently overvalued stock market (though to varying degrees). We have seen little during this period but the effect of a hot potato being repeatedly passed from speculative “overvalued, overbought, overbullish” market conditions fueled by massive central bank interventions, to renewed credit strains and emerging economic pressures that appear nearly the instant those interventions are even temporarily suspended. By turns, we’ve seen the repeated emergence of the same speculative conditions that have historically accompanied major and intermediate market peaks, followed by credit strains and economic pressures that reflect an unresolved overhang of global debt. The alternation is certainly not typical of market history. Nor is it typical of a complete market cycle or business cycle. As unsatisfactory as it may be, the market is presently in an extended game of “hot potato” which will be resolved by the market’s eventual departure from both environments. ....... Such a richly overvalued period is unique in U.S. stock market history, and as a direct result, 12-year periods of virtually zero returns are also rare. Only two periods come close. The stock market suffered negative returns in the 12 years after the 1929 peak, which started with the S&P 500 at about 22 times cyclically-adjusted earnings (the 10-year average of prior inflation-adjusted earnings). Stocks also achieved an average annual total return of just 3.7% in the 12 years between 1963 and 1975, owing to the unfortunate combination of a high starting valuation, with a starting price-earnings multiple of about 21, and a low ending valuation, with a multiple below 9. That depressed valuation in 1975 then set the groundwork for over two decades of excellent market returns. As of February 2012, the S&P 500 is again at a multiple of over 22 times cyclically adjusted earnings. Regardless of economic prospects, this is a strong headwind. As of February 2012, we estimate that the S&P 500 is likely to achieve an average annual total return of just 4.4% over the coming decade. However, this does not imply that strong investment opportunities will remain scarce for another decade. Projected long-term returns can rise quickly when the stock market declines significantly, which appears likely to occur within a far shorter period than a decade.