Monday, June 13, 2011

BUY say the New York Times and Time Magazine

Wow! The cover of the latest issue of Time Magazine is above this post. Black headlines bordered by red - the colors of danger and fear. The five myths cited on the cover are in my view not myths at all - but they are what Time thinks its readers believe and it is happy to reinforce those fears. The torn dollar whose pieces shrink in size moving from left to right (the direction of time progression) symbolize the shrinking values of stocks, real estate, and the US dollar, and the shrinking purchasing power of the dollar in times of high food and oil prices.

The New York Times chimed in Saturday with a stock market story on page 1, above the fold and just to the left of the headline column. "Stocks Plunge" is a pretty emotional description of what happened Friday and of the trend since May 2.

Take a look at the daily bar chart of the S&P 500 which goes back to the start of the bull market in March 2009. Notice the the S&P is above its rising 200 day moving average (red line), a fact that warrants the presumption that the bull market is still intact. Note too that the drop from the May 2 top is comparable to several other reactions seen within this bull market. In fact the market is still above the steep trend line (green dash line) I have drawn through the March 2009 and July 2010 lows. It is also above the April 2010 top.

Finally note that while the S&P is above its rising 200 day moving average it is well below its 50 day moving average (wiggly blue line), a typical buy configuration in a bull market.

Taken together these facts all point to a market which is offering aggressive contrarians a terrific buying opportunity. I think the S&P will be much higher 6 months from now and will probably reach the 1500 level before this bull market ends.


  1. Dear Friend Carl,
    This SO CALLED bull market
    ended in April 2010

    Now it is down at the levels of July 2010 bottom


    And Perhaps Even In ZIMBABWE DOLLAR

    Wrong SCALE, wrong song
    Yes, market can go higher, but only
    if Dollar Falls.

    Purchase Power is going down

    That is what is missing when you analyze the sentiment( even it it is New York Times).

    This time it may take decades( it already has) for markets to recover to 2000 levels.

    They should have said at TIMES

    What BULL!

    I think, that, for anybody but a PERFECT short term trader , Bullish bent has lost Purchase Power , if not MONEY

    Thanks Dear Friend

  2. Boris,

    this is all true, economy is in f.kup and it will collapse one day, blah-blah-blah. However, just forget all you know. Just follow the trend, and it is still up for now. We have a wonderful pullback, touching 200ma, strong support (qqq at 54), we have too many bearish people like you (see his previous post with the graph). Even with your examples SGD, EUR got some room to run for a bit longer. From the elliott point of view, we seems somewhere around 4 and 5.
    You've done some implementation of Trading Systems, why are you trying to force people to trade against such obvious facts?

  3. Dear Anton,
    I do not force anyone into anything.
    All I say is that, there are 300 million Americans, like us, who like to think our markets are going up.
    And then there is 6 Billion other people on earth who think that we are nuts, as our markets are not going up in their scales( currencies).

    You tell me who is right.

    Well I can tell you that you are losing purchase power, even if you make money in market going higher. Now, I never said market will not go higher. In fact, on this site, i always said.

    If market is to go up, rather buy gold or better yet SWISS Frank, which is what I have done and asked( not forced anyone) to do.

    And it has worked great as SPX/CHF is now at the lows of July 2010! WOW!
    Do i need to explain more?

  4. Boris,

    So, here we are, 1 month later. CHF lost even more, market is up sharply.

    It is not about being right or wrong. It's about trading. The trend of the market is much stronger of any words.

    ps. Curl, you are the God.