Although I'm not the proud bearer so early in 2011, bad news, events on the stock exchange, which require immediate attention to my readers are. In particular, blinking ads that I have red for shares.
Stock market sentiment is that as investors about stocks-has become very bearish. How to use this flag:
More positive investors feel about stock market investment mood, makes a more bearish. The logic is simple: investors stock market, usually wrong when when the Group believe that shared in a certain direction as the stock market always opposite of what was expected of it.
After a great 2009 and a good 2010, the prevailing consensus is that the worst is over for the U.S. economy and that stocks will have a great 2011. Nothing could be further from this consensus. The easy money in the stock market has already been made.
The S&P 500 is up 86% since its March 2009 low—the best rally for the S&P 500 in 55 years! I told my readers to get into stocks in March 2009 (and to stay in stocks right through 2009 and 2010), because the great majority of investors were avoiding the stock market. I was saying "buy" when everyone was selling or simply not interested in stocks. This is classic contrarian investing.
From 2011, it is a different story for me. Our internal analysis that experts has completed technology, Anthony Jasanský, p.Eng., an excellent study for us, in which he read a sense of the American Association of individual investors, investors intelligence (a service that allows compares, to follow the financial views of newsletters), head of the company U.S. sets/buy, and report / calls to the Chicago Board of Exchange (all known as useful indicators).
The bottom line: to many investors, consultants and analysts bullish on the stock exchange. This is actually a bearish for stocks. Keep in mind that the stock market always makes the opposite of what was expected of it. And the most popular party mood indicators flashing red for us as 2011.
The headlines flashing across Bloomberg and CNBC are all too positive. Just a day ago it was, "GM, Ford, Chrysler U.S. December Sales Top Analyst Estimates," "U.S. Manufacturing Expands at Fastest Pace in Seven Months," and more.
Couple all of the positive economic news with the biggest stock market rally in 55 years and we are dealing with the reverse of what has happened over the past 22 months—the bear has been successful in luring investors back into the stocks for 22 months, as stock prices rose. In due course, as more investors turn bullish, the bear market will start to bring stock prices back down.
Investors will wonder, "How can the stock market be moving lower when the economy is getting better?" The stock market is a leading indicator. All the positive economic news we are hearing today was discounted by the stock market months ago.
The year 2011 will be treacherous for investors. I don't expect to see the gains of 2009 and 2010 repeated. I do see the bear's ugly head returning amid a sea of rising optimism. I'm ringing the warning bell early for my beloved readers: Tread with caution in 2011.
Michael's Personal Notes:
According to Virginia-based American Bankruptcy Institute, 1.53 million Americans filed for bankruptcy in 2010—the highest amount since 2005 when the U.S. Bankruptcy Code was revamped by Congress.
While the U.S. Labor Department will report Friday that the U.S. created thousands of jobs in December of 2010, all is not well in America. Many Americans have given up looking for work (skewing the job numbers), the real estate market is not recovering, and there is a very strong possibility that one or more U.S. states will default on their debt in 2011 if a federal bailout of some states does not develop.
As I have written in my lead article today, I see events in motion that will have 2011 surprise on the downside.
Where the Market Stands; Where it's Headed:
Immediate-term, I see the bear market rally in stocks that started in March of 2009 continuing. Short- to medium-term, I'm starting to turn bearish on the stock market.
What He Said:
"Interest rates reduce the United States in 2004, the lowest level of the 46 years." And what are the Americans with their access to easy cash? She borrowed and lent more to invest the borrowed money in real estate. "The Fed is looking to the future (action brought interest rates low as to lure consumers, more than luxury to borrow) a day, is considered one of the most expensive mistakes committed by the same or other banking system in recent years 75." Michael Lombardi profit confidential, 21 July 2005. Long before anyone thought a banking crisis was Michael warning that coming real estate bust model with the banking system would be disastrous.
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