Saut: Pullbacks Will be Buying Opportunities
A couple of interesting comments from this week’s note by Jeff Saut at Raymond James. First, he notes that the currently bull stampede is one of the longest he’s recorded. Second, he notes the Lowry’s buying power index which historically shows that this sort of market strength tends to persist. In other words, buy the dips is what he’s saying….
“Further, today is session 49 in the current “buying stampede,” with the longest stampede chronicled in my notes of some 50 years ending at 53 sessions. Therefore, pressing the “long side” from here has negative odds. That said, Buying Power has moved to a new high while Selling Pressure is at a new reaction low. Moreover, the Buying Power index is about to cross over the Selling Pressure index. According to Lowry’s, “Throughout the 75-year history of Lowry’s Analysis, such positive crossings have always been viewed as an important sign of strength.” Therefore, any pullback should be viewed as a buying opportunity.”
Cullen Roche
Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services.
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It’s well known in physics and engineering, may be not in economy or finance: it’s called feedback, can be positive or negative and it’s one of the pillars of mutament and instability.
BTFD… until August or so…
Amazing how silent the bears are. From 666 to 1550 points, we hear only the bears, and now suddenly the bulls are all over!
The bears have been killed, this is a problem because they are a necessary component of the market. When the market will turn there will be a stampede to sell to nobody. The law of unintended consequences still works.
Here’s a mega bear who just turned into a bull!
http://www.businessinsider.com/richard-russell-buy-stocks-2013-3
So you’re telling me that there are some people who pay this guy for his advice ? The market is funny because people are funny.
Hahaha, so funny !
RICHARD RUSSELL: THIS IS A BEAR MARKET RALLY
5 NOVEMBER 2009
Richard Russell: ‘GET OUT OF STOCKS’ | Dec. 15, 2011
RICHARD RUSSELL: A Massive Stock Market Collapse Will Wipe Out 60 Years Of Inflation And Leveraging | Mar. 30, 2012
Poor Richard Russel doesn’t have much choice. His Dow Theory has forced him to turn bullish.
Yeah. The Transports finally confirmed the uptrend.
As long as the FED has its foot on the scale the Technicals and Fundamentals –DO NOT MATTER—-BUY BUY BUY!
Interesting to point out that this historical run up is on very low volume.
Kostolany said …high volume=weak hands are in the market…so low volume is not so bad thing
If the volume went up to 2007 levels, would you expect that to be a downdraft, or a surge pushing the market to the moon?
May 1st (bank squaring day), is the next seasonal inflection point in the markets. The 10 month roc in RRs (proxy for real-output), decelerates in May & progressively so in successive months. The 24 month roc in RRs (proxy for inflation) peaked in Feb (coterminous with prices at the pump).
The adage “sell in May & go away” reflects the Fed’s seasonal accommodation of the money market. Seasonality in May simply represents where the FRBNY’s “trading desk” drains reserves at that time of the year (via Reserve bank credit on its balance sheet, OMOs, etc). Folks who actually deal in money markets know this; others usually do not.
Interesting that other that new highs all his fed led bullish signs have been around for a few years. I guess survival is always more important than intellectual honesty. I prefer “buy because it is going up” argument. At least there is no pretence.