Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
The Euro Is Bidding Its Time: A Reversal at Hand? - 23rd May 19
Gold Demand Rose 7% in Q1 2019. A Launching Pad Higher for Gold? - 23rd May 19
Global Economic Tensions Translate Into Oil Price Volatility - 22nd May 19
The Coming Pension Crisis Is So Big That It’s a Problem for Everyone - 22nd May 19
Crude Oil, Hot Stocks, and Currencies – Markets III - 22nd May 19
The No.1 Energy Stock for 2019 - 22nd May 19
Brexit Party and Lib-Dems Pull Further Away from Labour and Tories in Latest Opinion Polls - 22nd May 19
The Deep State vs Donald Trump - US vs Them Part 2 - 21st May 19
Deep State & Financial Powers Worry about Alternative Currencies - 21st May 19
Gold’s Exciting Boredom - 21st May 19
Trade War Fears Again, Will Stocks Resume the Downtrend? - 21st May 19
Buffett Mistake Costs Him $4.3 Billion This Year—Here’s What Every Investor Can Learn from It - 21st May 19
Dow Stock Market Trend Forecast 2019 May Update - Video - 20th May 19
A Brief History of Financial Entropy - 20th May 19
Gold, MMT, Fiat Money Inflation In France - 20th May 19
WAR - Us versus Them Narrative - 20th May 19
US - Iran War Safe-haven Reasons to Own Gold - 20th May 19
How long does Google have to reference a website? - 20th May 19
Tory Leadership Contest - Will Michael Gove Stab Boris Johnson in the Back Again? - 19th May 19
Stock Market Counter-trend Rally - 19th May 19
Will Stock Market “Sell in May, Go Away” Lead to a Correction… or a Crash? - 19th May 19
US vs. Global Stocks Sector Rotation – What Next? Part 1 - 19th May 19
BrExit Party EarthQuake Could Win it 150 MP's at Next UK General Election! - 18th May 19
Dow Stock Market Trend Forecast 2019 May Update - 18th May 19
US Economy to Die a Traditional Death… Inflation Is Going to Move Higher - 18th May 19
Trump’s Trade War Is Good for These 3 Dividend Stocks - 18th May 19
GDX Gold Mining Stocks Fundamentals Update - 17th May 19
Stock Markets Rally Hard – Is The Volatility Move Over? - 17th May 19
The Use of Technical Analysis for Forex Traders - 17th May 19
Brexit Party Set to Storm EU Parliament Elections - Seats Forecast - 17th May 19
Is the Trade War a Catalyst for Gold? - 17th May 19
This Is a Recession Indicator No One Is Talking About—and It’s Flashing Red - 17th May 19
War! Good or Bad for Stocks? - 17th May 19
How Many Seats Will Brexit Party Win - EU Parliament Elections Forecast 2019 - 16th May 19
It’s Not Technology but the Fed That Is Taking Away Jobs - 16th May 19
Learn to Protect your Forex Trading Capital - 16th May 19
Gold Ratio Charts Offer The Keys to the Bull Market - 16th May 19
Is Someone Secretly Smashing the Stock Market at Night? - 16th May 19

Market Oracle FREE Newsletter

U.S. House Prices Analysis and Trend Forecast 2019 to 2021

New President, New Opportunity

Politics / Recession 2008 - 2010 Jan 20, 2009 - 02:33 PM GMT

By: Paul_J_Nolte

Politics Every four years or in recent times eight years, the country gets a new President to lead the country into the future. With so much hope and expectations placed upon Mr. Obama, the risks of not making those expectations are large. And while the country may be filled with hope and pride upon the election of the first Africa-American President – back at Wall Street, it is more of the same old “stuff”. Both Citigroup and Bank of America went to the government well to take another drink of TARP money to cover over more of the past sins of lending.

The economic recession/depression is not yet showing signs of moderating and we are hitting the middle of earnings season – what is not to like about investing! So far this year, as was the case last year – the high for the year was the first trading day and the gradual decline in '09 has been a test of the bullish resolve. Corporate comments regarding earnings season will be very important this quarter, we have already seen from Intel and JPMorgan's indications that the recession is not moderating. Here's to the new administration and a better economic outcome.

Last week we highlighted a few of the signs that the market was improving, from better volume trends and advance decline trends. However there are also some problems that have yet to be resolved that leaves the door open to lower prices ahead. First has been a rapid increase in bullish sentiment as captured by Investors Intelligence. The most recent reading of 43% bullish is above any reading since mid-June last year and strikes us as a bit optimistic if we are expecting “the bottom” to already be in place. Usually sentiment stays bearish as the market rises, however sentiment snapped back just as fast as stocks.

We would prefer the market to rise without the bullish sentiment as investors stay away as stocks rise, believing the worst is still ahead. The market itself is also of concern, as it has yet to register a higher high or higher low. This stair step downward pattern can be broken IF the markets do not get below 740 on the SP500 or can close above 1010 to the upside. Until then we are at best in a trading range that will serve to frustrate the early bulls (and maybe get sentiment lower!) and keep the “buy and hold” crowd on the sidelines in favor of the nimble trader.

Lower commodity prices, lower stock prices as well as oil prices have been a bit of heaven for bond investors. While income generation in the short-term treasury market is negligible with rates below a half of one percent, at least principle is remaining intact. Our model still points to lower bond yields, however we are getting to the point that any turn in either short rates or commodity prices will quickly turn the model negative. While the model may turn, bonds outside of treasuries may still benefit as the bond markets are looking like they are improving from the severe lock-up of the past quarter.

By Paul J. Nolte CFA

Copyright © 2009 Paul J. Nolte - All Rights Reserved.
Paul J Nolte is Director of Investments at Hinsdale Associates of Hinsdale. His qualifications include : Chartered Financial Analyst (CFA) , and a Member Investment Analyst Society of Chicago.

Disclaimer - The opinions expressed in the Investment Newsletter are those of the author and are based upon information that is believed to be accurate and reliable, but are opinions and do not constitute a guarantee of present or future financial market conditions.

Paul J. Nolte Archive

© 2005-2019 - 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