An Amazing Statistic From Morningstar

From the desk of Brian Gilmartin of fundatmentalis.com:

The 10-year return for the SP 500 from January 1, 2000 to December 31, 2009 was the worst 10-year return for the SP 500 EVER, even worse than the Great Depression.

 

The actual return during that period was a -1.38%, that is a cumulative 10-year return.

Even including 2013’s 32% return for the SP 500, the average 14-year return for the SP 500 since the March, 2000 peak is between 3% – 4%.

The average return for any 10-year period of the SP 500 is roughly 8.89%.

The point is that the last 14 year average return for the SP 500 is still well below the long-term average.

Bear Market Recoveries: A Comparison

4-bad-bears

From Doug Short, more herehttp://www.advisorperspectives.com/dshort/updates/Four-Totally-Bad-Bears.php

Where are we now?  This chart series features an overlay of the Four Bad Bears in U.S. history since the market peak in 1929. They are:

  1. The Crash of 1929, which eventually ushered in the Great Depression,
  2. The Oil Embargo of 1973, which was followed by a vicious bout of stagflation,
  3. The 2000 Tech Bubble bust and,
  4. The Financial Crisis following the record high in October 2007.

How To Recognize Them: A Visual History Of The Most Popular Market Tops And Bottoms

http://www.zerohedge.com/news/2014-10-17/how-recognize-them-visual-history-most-popular-market-tops-and-bottoms

Did Wednesday Mark a Capitulation Low?

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Update

Friday’s radio show will be a replay of last week due to seminars this week.   Voice is gone.

Also nothing has changed since last week for us in stocks (no change in radio content).  Trend is down and could see more selling or an overdue bounce.   Either way we remain heavy in cash or similar and or hedged.

Maybe this is the beginning of a nice correction or possibly another dip that is bought.  Too early yet.  However we do know the trend is broken.   If the latter – we will put cash to work or reduce or eliminate hedge once we see confirmation of a new uptrend.

Potential pecking at stocks that have appeared to have turned is also on the table as is taking profit of some hedges.

Nothing wrong with cash.  Cash is a position.

 

The Fear Factor

20141018_gdc022

An index of market uncertainty is at a two-year high:  “THE VIX, or “fear index,” rose to 26.25 percentage points on October 15th, reaching its highest level since a crisis over the fate of the euro currency in 2012. When markets smell trouble, the metric spikes. Specifically, the VIX tracks how much investors willing to pay to insure against sharp movements of the S&P 500 to move in the next 30 days: higher options prices imply higher volatility (and thus a higher VIX).”

More here from economist.com http://www.economist.com/blogs/graphicdetail/2014/10/daily-chart-10

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Falling Stocks and Economic Fundamentals

From James Pethokoukis this morning:  “A new report from Capital Economics carries this title: “Market moves hard to square with solid economic fundamentals.” But maybe the fundamentals are not so solid, not so sound. Maybe falling stocks are telling something we don’t really want to hear right now.”

More here:   http://www.aei-ideas.org/2014/10/stocks-are-falling-dont-worry-unless-these-two-things-happen-then-worry/

(4:37 AM) – Everything Breaks Again: Futures Tumble; Peripheral Yields Soar, Greek Bonds Crater

http://www.zerohedge.com/news/2014-10-16/everything-breaks-again-futures-tumble-peripheral-yields-soar-greek-bonds-crater

More on Number 4

The Empire State Manufacturing Survey:

“This morning we got the latest Empire State Manufacturing Survey. The diffusion index for General Business Conditions continues is expanding at a much weaker pace. The headline number dropped 21 points to 6.17, down from 27.54 last month. That’s the largest monthly decline since November 2011 and the second largest drop in the history of this series.

The Investing.com forecast was for a reading of 20.5.”

More here:  http://www.advisorperspectives.com/dshort/commentaries/Empire-Manufacturing-Update.php?WT.rss_f=dshortRSS&WT.rss_ev=a&WT.rss_a=Empire_State_Manufacturing:_Huge_Drop_in_Rate_of_Expansion

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About Us

Welcome fellow traders and investors,

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

Our methods are not the traditional advice you hear repeated and repackaged over and over again, but that’s exactly the point and the reason why we know how to advance and prosper in every kind of market.

To Your Success,

Doug & Gary