Louise Yamada Speaks And We Should Listen.

There are different competencies of quantitative analysis. It is my personal opinion that Louise Yamada is probably the most brilliant mind on Wall Street for her area of competency. I tend to focus less on charts and more on data than Yamada. And, I tend to view quantitative analysis as a window into fundamental analysis. That is why I am able to share much of the output to my work using fundamentals or practical commentary. ie, Anticipating the credit crunch, the banking mess, the China implosion, emerging markets crises, etc. That Yamada draws similar conclusions to mine with complementary analysis is an anecdotal data point I value substantially. There may be five people in the entire quantitative analysis community I would make such a statement about. Globally. In other words, I can't overstate my respect for her abilities.

On a shorter term basis Yamada notes 600 as a potential next stop for the S&P. In some of the comments on here three or four weeks ago I highlighted that the supposed early October lows showed no signs of a sustainable bottom and that 600-724 on the S&P would represent a potential interim low. Anticipating shorter term moves is so esoteric that it's more of an art than a science. In other words, anticipating short term moves can often be akin to gambling - not at the top of my hobby list. From a risk management standpoint, a decline to 600 on the S&P is 40% lower than the upper end of the October 2008 trading range. So those buying in October will be decimated even more than those holding through the October 2007 to October 2008 decline should we drop to 600.

Here is Yamada's interview on Bloomberg video.