Is The Bear Market Over?
I've spent alot of time studying markets over my life. Now, that doesn't mean I know everything there is to know but there is no such person. But, I do believe that qualifies me as an expert. At least as much of an expert as many telling us there was such a thing as Goldilocks and within the last week that she is making a reappearance. I realized long ago that Wall Street never knew what it was talking about. Specific people in the industry could rise above the madness but they were typically beaten down and left quietly. There's little room for transparency and honesty in an industry that is seeking more and more investor money for their ongoing fee-based money management business. To be bearish means the spigot of new money could be shut off.
As Wall Street has continued to grow in its size and influence on the real economy, the average talent level has dropped. It's that good old demand & supply equation. Positions were filled with marginal talent. Therefore, the average ability of the industry has diminished greatly. And, as we have quoted Gustave LeBon, the herd takes on the intelligence of the least among itself.
In the last week, a bevy of Wall Street types have come out and made buy recommendations and some prognosticators have even gone so far as to tell us this may be the end of the bear market. But, before the bear market is determined to be over, wouldn't it be nice if we could at least get a rally? A real rally? Any rally? Not a day or two. Sentiment, put/call ratios and all of the other supporting gibberish is telling us a rally must develop here with odds greater than 90% according to many.
I pulled this after the market closed today so it is current. And, not only have buyers not returned to this market but it looks like they are still leaving. In fact, we haven't had any significant buyers since the first half of 2007. Could that change? Sure. It might change tomorrow or next week or next month or next year or in ten years. But, if I've learned one thing over the years, it is to dismiss anyone who calls a bear market bottom on a specific day. Especially because of exuberance associated with the Fed saving what could have been a chain reacting collapse of Wall Street.
Update re a comment: The below chart is a proprietary measure of buyers and sellers. Above zero means buyers are in control. Below zero means sellers are in control. The black horizontal line is the zero line.
As Wall Street has continued to grow in its size and influence on the real economy, the average talent level has dropped. It's that good old demand & supply equation. Positions were filled with marginal talent. Therefore, the average ability of the industry has diminished greatly. And, as we have quoted Gustave LeBon, the herd takes on the intelligence of the least among itself.
In the last week, a bevy of Wall Street types have come out and made buy recommendations and some prognosticators have even gone so far as to tell us this may be the end of the bear market. But, before the bear market is determined to be over, wouldn't it be nice if we could at least get a rally? A real rally? Any rally? Not a day or two. Sentiment, put/call ratios and all of the other supporting gibberish is telling us a rally must develop here with odds greater than 90% according to many.
I pulled this after the market closed today so it is current. And, not only have buyers not returned to this market but it looks like they are still leaving. In fact, we haven't had any significant buyers since the first half of 2007. Could that change? Sure. It might change tomorrow or next week or next month or next year or in ten years. But, if I've learned one thing over the years, it is to dismiss anyone who calls a bear market bottom on a specific day. Especially because of exuberance associated with the Fed saving what could have been a chain reacting collapse of Wall Street.
Update re a comment: The below chart is a proprietary measure of buyers and sellers. Above zero means buyers are in control. Below zero means sellers are in control. The black horizontal line is the zero line.
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