Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Has the Fed Let the Inflation Genie Out of the Bottle? - 10th Aug 20
The Strange Food Trend That’s Making Investors Rich - 10th Aug 20
Supply & Demand For Money – The End of Inflation? - 10th Aug 20
Revisiting Our Silver and Gold Predictions – Get Ready For Higher Prices - 10th Aug 20
Storm Clouds Are Gathering for a Major Stock and Commodity Markets Downturn - 10th Aug 20
A 90-Year-Old Stock Market Investment Insight That's Relevant in 2020 - 10th Aug 20
Debt and Dollar Collapse Leading to Potential Stock Market Melt-Up, - 10th Aug 20
Coronavirus: UK Parents Demand ALL Schools OPEN September, 7 Million Children Abandoned by Teachers - 9th Aug 20
Computer GPU Fans Not Spinning Quick FIX - Sticky Fans Solution - 9th Aug 20
Find the Best Speech Converter for You - 9th Aug 20
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Hey Professor Roubini! The Street Says The Dow Is Going to 15,000! Are They Nuts?

Stock-Markets / Stocks Bull Market Jul 24, 2009 - 08:33 AM GMT

By: Andrew_Butter

Stock-Markets

Best Financial Markets Analysis ArticleWe didn't hear much talk about that "dead-cat-bounce-sucker-rally" recently, and all those guys with those pretty brightly-colored P/E ratio charts and pages and pages of verbiage predicting S&P 500 going to 450 seem to have disappeared along with the “Gold piercing $1,000 and on to the stratosphere” theorists.  Perhaps they are on holiday?


14th March Professor Roubini, the man who saw it all coming like a walking-talking crystal ball (and unfortunately didn't get anyone to listen to him before it was too late), declared that the sinners would surely repent, and that cat was DEAD-DEAD-DEAD!!

Sackcloth and ashes all round!! Or what?  Didn't I hear someone say something along the lines of, "A broken clock is right twice a day?"

But now the word on The Street is its Game Over, “Dow 10,000 by the end of the year and 15,000 in sight” (http://www.thedailybell.com/index.asp?fl=).

Just for the record this is what I said:

1: In January I said that the S&P 500 would bottom at about 660 (http://www.marketoracle.co.uk/Article8293.html)** It did on the 9th of March.

2: On 9th March I said “That was The Bottom”, it’s over! (http://www.marketoracle.co.uk/Article9321.html).

3:  On 19th March, after Professor Roubini’s now famous misdiagnosis of the health of that darn cat, I conducted a carefully designed Physics experiment throwing hundreds of dead cats from buildings, from various heights, and I meticulously recorded how high they bounced. I concluded after extensive statistical analysis (multivariate, ANOVAR the lot), that in my humble medical and scientific opinion the cat was most certainly not dead (http://www.marketoracle.co.uk/Article9749.html).

4: On 25th March I wrote that Bernake and Geithner were following the wrong map and that  “The good news is that it looks like USA is almost out of the cycle of insanity that started in 1995, what happens next depends of course on the pilots (and I do wish they had the right maps).” http://www.marketoracle.co.uk/Article9658.html

5: 17th April I repeated the dead cat experiment just to be sure and put out a “Bull Run Warning”. http://www.marketoracle.co.uk/Article10101.html

6: On 12th May I said that the market would go bubbling up at least to DJIA = 10,000 with perhaps some hiccups on the way but none of them more than 15% (the maximum peak to trough reversal so far was 7%): (http://www.marketoracle.co.uk/Article10604.html).

So where are we now?

Today the Dow is 9,069 and the S&P 500 is 976.

Silly me, the first time I thought about stock markets in my life  (in January), I thought the Dow was 10x the S&P 500, that shows how much I know about stock markets. For the avoidance of doubt, I don’t know anything about stock markets  in fact, all I know about is how to do valuations. Second hand bottling plants, marriage contracts, nuclear power stations. It’s all the same to me;  just I always work out two values:

a): What someone dumber than you would pay (that’s easy, mark-to-market, just look at the sticker).
b): What someone smarter than you would pay (that’s the hard one to work out).

Well anyway, the "correct" price for the S&P 500 exactly today is 1,250.

Based on the well known principles of market-long-waves  plus the Seven Immutable Laws of Bubbles (http://www.marketoracle.co.uk/Article12114.html) I do not expect a reversal of any magnitude until that is reached unless there is a huge new upset in the economy, it will get there sooner or later even if the economy flat-lines for another year, or even two.

What happens next will depend on what the geniuses who created this mess do next. The temptation will be to keep foot-on-gas, in which case there will be another bubble, which will burst, eventually, and will cause even more economic damage (that’s what the guy in the cave is hoping, personally I think he’s got “connections” in you-know-where, that’s the way those guys work – very tricky).

If they start acting like grown ups for a change (why am I worried about that?), then the US stock market will go up broadly in proportion to nominal GDP divided by long term interest rates.

Of course if they forget to take foot-off-gas, then what’s going to happen next, in the immortal words of that Great American Poet Toni Tennilli, will be… "Do that to me one more time....BABY!!"

Hey “Casey Jones - watch your SPEED!!” (Hat tip: Grateful Dead); here’s a tip, when S&P 500 hits 1,100; start easing off.

Hey Ben - watch the ROAD!!

Here’s a tip, when S&P 500 hit’s 1,100; start easing off.

**Just for the record I got the timing on the S&P bottom wrong, but I figured out why that was and corrected it when it got to 660 on http://www.marketoracle.co.uk/Article9321.html). Sorry about that, got confused for a second by the 9/11 mini bubble, I blame it all on the man in the cave.

No Positions

By Andrew Butter

Andrew Butter is managing partner of ABMC, an investment advisory firm, based in Dubai ( hbutter@eim.ae ), that he setup in 1999, and is has been involved advising on large scale real estate investments, mainly in Dubai.

© 2009 Copyright Andrew Butter- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Andrew Butter Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules