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B4 The Belll Frieday October 22


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#556 Basho

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Posted 25 October 2004 - 12:25 AM

Hussman has some interesting comments on the merits of judging sentiment indicators from a "relative" rather than absolute viewpoint:

Turning to current conditions, last week, according to Investors Intelligence, the percentage of bullish investment advisors surged to 58.9% while bears declined to a very low 22.1% (19% are in the “correction” camp).

Now, it's important to interpret advisory sentiment correctly. If you study this indicator closely, you'll find that the percentage of bullish investment advisors can be largely explained simply by past market performance over a variety of horizons. In general, strong markets have more bulls. Not surprising. Since we also know that there is no large or simple correlation between market movements in the recent past and market movements in the near future, it follows that the part of advisory sentiment explained by past movements is just plain uninformative as well.

So before looking at advisory sentiment, we have to factor out the portion that is explained simply by past market movements. Once we've done this, we are left with a much more informative indicator.

And that's a problem here. While 58.9% bulls is certainly not a figure that would be surprising if the market was enjoying substantial strength, it is completely out of line with the flatness of market action in recent months. On my own measures, I calculate that bullishness is currently about 17% higher than can be explained by past market performance.

Here's the implication. Historically, when that “excess bullishness” has been greater than 15%, the S&P 500 has produced an average annualized return of just 4.51% (specifically, that's a quarterly return annualized. In nearly all cases, valuations were substantially better than they are today). When excess bullishness was between –15% and +15%, the S&P 500 produced an average annualized return of 11.53%. Finally, when excess bullishness was –15% or less, meaning that there were far too few bulls after correcting for past market performance, the S&P 500 produced an average annualized return of 22.99%. Properly interpreted, sentiment does matter, and there are too many bulls here.


regards

Basho

http://www.hussmanfu...c/wmc041025.htm

#557 dozer

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Posted 25 October 2004 - 12:27 AM

BG, B4, tanks for the word. I've had enough of cold-winters...

But how cold is "damn cold" ? I lived in Minnesota for 25 yrs... :lol:

Actually, I -would- appreciate a PM from those with current BC knowledge....mining-specific, or real-estate knowledge (rural land), or bargains on used heavy-equipment....or good contacts in those fields. I'm at the point of being ready to make calls, price things out, etc..

Same for NZ, altho I can't recall seeing a kiwi on the Stool so far...??

#558 Lock Limit Down

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Posted 25 October 2004 - 06:51 AM

I am stunned with the lack of support on the dollar
84.85
Today should be historic
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"If the American people ever allow private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them (around the banks), will deprive the people of their property until their children will wake up homeless on the continent their fathers conquered." --- Thomas Jefferson

#559 Bastiat

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Posted 25 October 2004 - 07:05 AM

It's raining, it's pouring.........

Norway dispute sparks latest oil rise

October 25, 2004 10:40
Oil prices hit new highs on both sides of the Atlantic this morning as a threat by Norwegian shipowners to halt production from the world's third biggest exporter fuelled fears of a winter supply crunch.

US light crude rose 49 cents to a fresh peak of $55.67 a barrel and London Brent jumped 68 cents to a record $51.90. Prices are up 70% since the start of the year.

The Norwegian Shipowners Association threatened to expand a lockout of oil rig workers to shut Norway's three million barrels per day oil output in a bid to end a near four-month dispute.


It said the move, which would start from midnight on Monday November 8, would have immediate effect and would halt all oil and gas production within a week.

Norway's government has in the past stepped in to end oil industrial disputes when there is a widespread threat to production and workers said the threat was a ploy to provoke the government to intervene. The strike so far has closed just 55,000 barrels per day.

The new threat boosted a market already jittery over supply disruption in the US Gulf of Mexico which has disrupted the normal build-up of heating fuel stocks ahead of winter. The long-lasting impact of Hurricane Ivan, which tore through the Gulf of Mexico in mid-September, has kept closed more than 400,000 barrels per day of crude output.

Weekly US government data last week showed a drop in distillate (heating oil and diesel) supplies that left heating fuel at a 12% deficit compared with last year.


Norway ???





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