June 26, 2008 Update: S&P500 1283. The CB Indicator 3 never ceases to amaze. In early May, the Indicator gave a sell signal in the S&P 1410 area. Followers of the Indicator 3 have been out of the market since then. That same indicator has issued a Buy signal today, as we look for a bottom to form here. Followers of CB Indicator 3 are re-entering the market tomorrow. This commentator held through the May 2nd sell signal, and has been thumped. The lesson here is: Don't fight the model; It is what keeps you from buying high and selling low.
May 30, 2008 Update: S&P500 1400. Just a short comment about today's Personal Income numbers that is worth mentioning, during our current climb back to the mid-1400's... The headlines tell us that the PI numbers are so-so; a little weak, but in line with expectations. What they don't tell you is that the numbers for the previous 7 months have all been revised upwards. This explains the current earnings reports, and why the GDP was revised upwards for the first quarter. We are happy with this report. Also, Real Personal Consumption Expenditures (PCE) show that inflation is held at bay, which is great, and better than expected. That is great news. We will be selling at higher levels!
May 7, 2008 Update: S&P500 1399. We like this minor pullback, as our CB Indicator 3 was getting very close to a sell signal, and we believe the market has plenty of room to run higher. This is health-restoring to our run-up. As soon as the masses realize that the market is strengthening without them, there will be a large influx of capital into the market. A lot of investors have been afraid of the market, and have been sitting in cash. Momentum is our friend here. It is fun to hear the 'Wall Street luminaries' now telling us 'the worst is behind us', long after the market has climbed far away from the bottom. CrystalBull followers knew the bottom when it happened, and were able to act on it. Smiles all around here.
Apr 30, 2008 Update: S&P500 1398. Looking good here! The Q1 GDP number that was released today was good news... Funny how the media did not publish the surprise. They have been telling us for months that we are in a recession, but today's number belies that. The headlines should have read, "No recession!", but instead, they read, "Weak economy". Note, we expect this GDP number to be revised downward over the next few months, but 0.6% real growth in GDP in this environment was a real positive surprise for most. With a 25 basis point drop by the Fed, and the stimulus checks arriving, we should see S&P500 1450 in the very near future. When the headlines read, "Dow back over 13000", money will again start returning to the market. Those following our CB Indicator 3 have been well-rewarded. We expect the market to rise past the next sell signal in CB Indicator 3, so we will not be anxious to sell yet. Thank you to the world media for giving us this buying opportunity.
Mar 28, 2008 Update: S&P500 1330. Today's Personal Income figures were promising. While Personal Income did not rise a great deal, it did rise. In this environment, where the talking heads have been predicting doomsday, those figures disprove their outlook. What is interesting in these figures is that Personal Spending decreased. Personal Spending drives a large part of the economy, so that demonstrates current weakness. But with a rising Personal Income, and falling Personal Spending (and equivalent tax rates), the Personal Savings figure increases. That is just what we've had. Personal savings means that people are hoarding their cash or paying off debts. That paints a picture of the future with increased spending to come. As the stock market is a predictor of the future, this is the light at the end of the tunnel we've been looking for. February's unexpected rise in Personal Income is a good thing. The market, and the each family's own cathartic correction in their personal finances, is a Spring cleaning of sorts, paving the way for a better economy ahead.
Mar 11, 2008 Recession Update. We have been holding the opinion that the US would NOT enter into a recession, that, while GDP growth would be anemic, we would not have 2 consecutive quarters of negative growth. We wish to update that. First, as we have stated before, defining a "recession" this way is meaningless. That real GDP growth slowed from 4+% to near zero is far worse than it slowing from 0.5% to -0.5%. That said, here is the update: Recent New Jobs figures are the best tell that we are in recession. Historically, whenever we have had 2 consecutive months of negative jobs growth have been recession periods. More importantly, remember that a "recession" is defined as negative REAL growth (meaning after subtracting out inflation). We believe we are currently in 4+% CPI territory, which should be greater than any nominal GDP growth. That, by definition, will put is in negative REAL territory for this quarter. Will it continue through next quarter? 50/50 yes/no. The stimulus package may just keep us out of that territory. This is just idle chatter, as we will not know the GDP data for many months to come, too late to act on it. Also, some of the best buying opportunities have occurred during recessions, and we believe that is the case currently, as recent market weakness is unsustainable long-term.
Now, the CrystalBull Indicator 3 issued another flat-out Buy signal yesterday, in the area of S&P 1275. In our opinion, those following the indicator will be well-rewarded long-term.
As we claw our way back to the 1400's, the media will catch on, and we expect to see much higher levels. This market has formed a bottom. As the 1st Quarter earnings start coming in, scared-off investors will realize that the stock market is a better investment than the pitiful returns of their CDs and money market accounts. This has been a selloff fueled by fear. US exporters are seeing fantastic earnings growth right now, with the weak US Dollar making American purchases real bargains in the international markets. European producers are already crying for a weaker Euro. This is certainly a fascinating time to be following the data and US stock market.
Feb 13, 2008 Update: S&P500 1353. Well, we finally got everything that we were anticipating: a stimulus package from Washington, and a near double-bottom test of S&P 500 closing lows. In our opinion, investors will be well-rewarded in the coming weeks and months. New Jobs figures were weaker than expected, indicative of the slow growth and fear. We expect that to turn around quickly.
Jan 31, 2008 Update: S&P500 1350. In this environment, today's Personal Income and Spending numbers were terrific. All our media can do to spin this negative is to say that Consumer Spending rose, but "only slightly". Many were predicting a flat-out decrease in Consumer Spending. With Personal Income rising nicely, and Spending held at bay, there is pent-up demand for goods that will released as soon as the gloom rises. That is bullish. We are anxiously awaiting the New Jobs figure which is imminent. If it comes in near the consensus estimate of 65000, we will be happy. We reiterate: these numbers are not indicative of a recession. Jobless claims are up, so we will keep an eye on that. But we believe we are at or near the bottom, and things will improve. That is when we contrarians want to buy.
Jan 25, 2008 Update: S&P500 1350. Information is trickling in that warrants an update here. It appears that the global selloff on Monday, and follow-through selloff in the US during the first half of Tuesday were caused by the unloading of positions by Société Générale in France. (You may have heard about the fraudulent trades by a rogue trader there). Société Générale made the amateurish move of selling into a weak market, all at once, over the weekend and on Monday. We had attributed the selloff to panic and capitulation by investors, but it appears that it was instead triggered by an exogenous selloff, a transient event. We no longer expect to revisit the lows of Tuesday, and believe the bottom has been put in place. We may get to the mid-1400s faster than anticipated. But uncertainty still prevails, so expect a bumpy ride. Stay tuned.
Jan 24, 2008 Update: S&P500 1346. Fear and panic pushed the market lower than our models predicted, but we believe the bottom was formed on Tuesday, as the weakest were flushed out of the market. We may retest that level (which would confirm the bottom), but our models point higher. The Fed acted wisely, and a stimulus package is near agreement, just in time for the State of the Union address. We are not expecting a rapid rise here, but a slow crawl back to the mid-1400s, as a high level of fear remains. U.S. media sources have done a terrible disservice here, yelling "FIRE!" in a crowded theater, when the fundamentals belie their calls for panic. They are doing their part to slow the US economy, because most would love to see the Bush economy fail. A smart investor would be wise to remember that the talking heads bringing you the economic "news" typically know less about economics than you do. That is why we're here: to bring you the true economic statistics for your own study.
Jan 17, 2008 Update: S&P500 1332. Stocks are ON SALE today. We expect a strong economic stimulus package to be announced no later than the President's State of the Union address. Expect a 50 basis point rate cut very soon. We expect the S & P to be at least 8% higher in the next 80 days. The Crystal Bull Indicator 3 has given an outright Buy signal today.
Jan 9, 2008 Update: S&P500 1389. Volatility has taken a bite out of the market. This is normal and healthy. Many have run for the exits, which is what we look for in a "Buy" signal. The Put/Call ratio is near 1.4 today, which is unsustainable. We believe that most of the sellers have already sold. It is a great time to "Buy Low".
We are anticipating a stimulative move from the Fed/Treasury/White House. This should be the catalyst for our next move higher.
We are bullish here. Watch the Crystal Bull Indicator 3 for the next exit point.
May 30, 2008 Update: S&P500 1400. Just a short comment about today's Personal Income numbers that is worth mentioning, during our current climb back to the mid-1400's... The headlines tell us that the PI numbers are so-so; a little weak, but in line with expectations. What they don't tell you is that the numbers for the previous 7 months have all been revised upwards. This explains the current earnings reports, and why the GDP was revised upwards for the first quarter. We are happy with this report. Also, Real Personal Consumption Expenditures (PCE) show that inflation is held at bay, which is great, and better than expected. That is great news. We will be selling at higher levels!
May 7, 2008 Update: S&P500 1399. We like this minor pullback, as our CB Indicator 3 was getting very close to a sell signal, and we believe the market has plenty of room to run higher. This is health-restoring to our run-up. As soon as the masses realize that the market is strengthening without them, there will be a large influx of capital into the market. A lot of investors have been afraid of the market, and have been sitting in cash. Momentum is our friend here. It is fun to hear the 'Wall Street luminaries' now telling us 'the worst is behind us', long after the market has climbed far away from the bottom. CrystalBull followers knew the bottom when it happened, and were able to act on it. Smiles all around here.
Apr 30, 2008 Update: S&P500 1398. Looking good here! The Q1 GDP number that was released today was good news... Funny how the media did not publish the surprise. They have been telling us for months that we are in a recession, but today's number belies that. The headlines should have read, "No recession!", but instead, they read, "Weak economy". Note, we expect this GDP number to be revised downward over the next few months, but 0.6% real growth in GDP in this environment was a real positive surprise for most. With a 25 basis point drop by the Fed, and the stimulus checks arriving, we should see S&P500 1450 in the very near future. When the headlines read, "Dow back over 13000", money will again start returning to the market. Those following our CB Indicator 3 have been well-rewarded. We expect the market to rise past the next sell signal in CB Indicator 3, so we will not be anxious to sell yet. Thank you to the world media for giving us this buying opportunity.
Mar 28, 2008 Update: S&P500 1330. Today's Personal Income figures were promising. While Personal Income did not rise a great deal, it did rise. In this environment, where the talking heads have been predicting doomsday, those figures disprove their outlook. What is interesting in these figures is that Personal Spending decreased. Personal Spending drives a large part of the economy, so that demonstrates current weakness. But with a rising Personal Income, and falling Personal Spending (and equivalent tax rates), the Personal Savings figure increases. That is just what we've had. Personal savings means that people are hoarding their cash or paying off debts. That paints a picture of the future with increased spending to come. As the stock market is a predictor of the future, this is the light at the end of the tunnel we've been looking for. February's unexpected rise in Personal Income is a good thing. The market, and the each family's own cathartic correction in their personal finances, is a Spring cleaning of sorts, paving the way for a better economy ahead.
Mar 11, 2008 Recession Update. We have been holding the opinion that the US would NOT enter into a recession, that, while GDP growth would be anemic, we would not have 2 consecutive quarters of negative growth. We wish to update that. First, as we have stated before, defining a "recession" this way is meaningless. That real GDP growth slowed from 4+% to near zero is far worse than it slowing from 0.5% to -0.5%. That said, here is the update: Recent New Jobs figures are the best tell that we are in recession. Historically, whenever we have had 2 consecutive months of negative jobs growth have been recession periods. More importantly, remember that a "recession" is defined as negative REAL growth (meaning after subtracting out inflation). We believe we are currently in 4+% CPI territory, which should be greater than any nominal GDP growth. That, by definition, will put is in negative REAL territory for this quarter. Will it continue through next quarter? 50/50 yes/no. The stimulus package may just keep us out of that territory. This is just idle chatter, as we will not know the GDP data for many months to come, too late to act on it. Also, some of the best buying opportunities have occurred during recessions, and we believe that is the case currently, as recent market weakness is unsustainable long-term.
Now, the CrystalBull Indicator 3 issued another flat-out Buy signal yesterday, in the area of S&P 1275. In our opinion, those following the indicator will be well-rewarded long-term.
As we claw our way back to the 1400's, the media will catch on, and we expect to see much higher levels. This market has formed a bottom. As the 1st Quarter earnings start coming in, scared-off investors will realize that the stock market is a better investment than the pitiful returns of their CDs and money market accounts. This has been a selloff fueled by fear. US exporters are seeing fantastic earnings growth right now, with the weak US Dollar making American purchases real bargains in the international markets. European producers are already crying for a weaker Euro. This is certainly a fascinating time to be following the data and US stock market.
Feb 13, 2008 Update: S&P500 1353. Well, we finally got everything that we were anticipating: a stimulus package from Washington, and a near double-bottom test of S&P 500 closing lows. In our opinion, investors will be well-rewarded in the coming weeks and months. New Jobs figures were weaker than expected, indicative of the slow growth and fear. We expect that to turn around quickly.
Jan 31, 2008 Update: S&P500 1350. In this environment, today's Personal Income and Spending numbers were terrific. All our media can do to spin this negative is to say that Consumer Spending rose, but "only slightly". Many were predicting a flat-out decrease in Consumer Spending. With Personal Income rising nicely, and Spending held at bay, there is pent-up demand for goods that will released as soon as the gloom rises. That is bullish. We are anxiously awaiting the New Jobs figure which is imminent. If it comes in near the consensus estimate of 65000, we will be happy. We reiterate: these numbers are not indicative of a recession. Jobless claims are up, so we will keep an eye on that. But we believe we are at or near the bottom, and things will improve. That is when we contrarians want to buy.
Jan 25, 2008 Update: S&P500 1350. Information is trickling in that warrants an update here. It appears that the global selloff on Monday, and follow-through selloff in the US during the first half of Tuesday were caused by the unloading of positions by Société Générale in France. (You may have heard about the fraudulent trades by a rogue trader there). Société Générale made the amateurish move of selling into a weak market, all at once, over the weekend and on Monday. We had attributed the selloff to panic and capitulation by investors, but it appears that it was instead triggered by an exogenous selloff, a transient event. We no longer expect to revisit the lows of Tuesday, and believe the bottom has been put in place. We may get to the mid-1400s faster than anticipated. But uncertainty still prevails, so expect a bumpy ride. Stay tuned.
Jan 24, 2008 Update: S&P500 1346. Fear and panic pushed the market lower than our models predicted, but we believe the bottom was formed on Tuesday, as the weakest were flushed out of the market. We may retest that level (which would confirm the bottom), but our models point higher. The Fed acted wisely, and a stimulus package is near agreement, just in time for the State of the Union address. We are not expecting a rapid rise here, but a slow crawl back to the mid-1400s, as a high level of fear remains. U.S. media sources have done a terrible disservice here, yelling "FIRE!" in a crowded theater, when the fundamentals belie their calls for panic. They are doing their part to slow the US economy, because most would love to see the Bush economy fail. A smart investor would be wise to remember that the talking heads bringing you the economic "news" typically know less about economics than you do. That is why we're here: to bring you the true economic statistics for your own study.
Jan 17, 2008 Update: S&P500 1332. Stocks are ON SALE today. We expect a strong economic stimulus package to be announced no later than the President's State of the Union address. Expect a 50 basis point rate cut very soon. We expect the S & P to be at least 8% higher in the next 80 days. The Crystal Bull Indicator 3 has given an outright Buy signal today.
Jan 9, 2008 Update: S&P500 1389. Volatility has taken a bite out of the market. This is normal and healthy. Many have run for the exits, which is what we look for in a "Buy" signal. The Put/Call ratio is near 1.4 today, which is unsustainable. We believe that most of the sellers have already sold. It is a great time to "Buy Low".
We are anticipating a stimulative move from the Fed/Treasury/White House. This should be the catalyst for our next move higher.
We are bullish here. Watch the Crystal Bull Indicator 3 for the next exit point.