Comments on: Analysts and institutions: stocks “extremely cheap” despite 1.7% yields after 80% rally. Hussman & Prechter: another crash likely. http://sovereignspeculator.com/2010/04/26/analysts-and-institutions-call-stocks-extremely-cheap/ Thoughts on the markets and the decline of the west Mon, 20 Dec 2010 14:02:56 +0000 http://wordpress.org/?v=2.6 By: Mike http://sovereignspeculator.com/2010/04/26/analysts-and-institutions-call-stocks-extremely-cheap/#comment-9005 Mike Tue, 27 Apr 2010 12:45:13 +0000 http://sovereignspeculator.com/?p=4486#comment-9005 Yeah, it's insane. IYR in particular shows just how nuts -- according to google finance, it's only paying a dividend of about 40-50 cents per quarter, just a 4% yield. This is a pretty skimpy reward for the risk of holding CRE and residential assets in this market. Yeah, it’s insane. IYR in particular shows just how nuts — according to google finance, it’s only paying a dividend of about 40-50 cents per quarter, just a 4% yield. This is a pretty skimpy reward for the risk of holding CRE and residential assets in this market.

]]> By: rogerjarema http://sovereignspeculator.com/2010/04/26/analysts-and-institutions-call-stocks-extremely-cheap/#comment-9004 rogerjarema Mon, 26 Apr 2010 19:07:26 +0000 http://sovereignspeculator.com/?p=4486#comment-9004 Yes, this is crazy indeed. But it doesn't mean that it can't get crazier. Just look at this chart: http://stockcharts.com/h-sc/ui?s=IYR&p=W&b=5&g=0&id=p61450500005&a=195314209&listNum=4&listNum=4 IYR is breaking its: 1. 200 Week MA resistance 2. great bear trendline resistance 3. upper BB 4. horizontal trendlines off 1H2008 lows. There is still the zone of resistance but it's wide and it allows for IYR to go over 60. What's going on out there? RE is collapsing, CRE is imploding... yet RE stocks are rallying like mad. BTW, the retracements I put is not working anymore, just trying to show how mad it is. This is a huge bubble, but who dares to say it can't inflate more? The scary thing about commodities going nowhere is that it could also be forming a base for an even non-sense launch upwards. I begin to think it will require something really bad to occur for this market to go down, e.g. collapse in US treasuries, commodity snap up (causing kind of a stagflation on one part of the economy - while deflation still persists in general) & the likes. In EW counting, it is also quite likely that the dollar is about to embark on Intermediate (2) down... not sure about this, but the last few months, the advance has been lacklustre. There has been much about 2000/2007 parallels I have heard. How silly it was to be buying stocks during the peaks. But in late 1998-1999, if we were not buying, we would have been ridiculed by the brain deads. And sure enough... the brain deads outperformed as the rise preceding the collapse was parabolic. It happened to 2007 nickel & 2008 oil, too. Graphite the other day mentioned iron ore is the 2010 version of 2007 nickel & 2008 oil. Yes, this is crazy indeed. But it doesn’t mean that it can’t get crazier. Just look at this chart:
http://stockcharts.com/h-sc/ui?s=IYR&p=W&b=5&g=0&id=p61450500005&a=195314209&listNum=4&listNum=4

IYR is breaking its:
1. 200 Week MA resistance
2. great bear trendline resistance
3. upper BB
4. horizontal trendlines off 1H2008 lows.

There is still the zone of resistance but it’s wide and it allows for IYR to go over 60. What’s going on out there? RE is collapsing, CRE is imploding… yet RE stocks are rallying like mad. BTW, the retracements I put is not working anymore, just trying to show how mad it is. This is a huge bubble, but who dares to say it can’t inflate more?

The scary thing about commodities going nowhere is that it could also be forming a base for an even non-sense launch upwards. I begin to think it will require something really bad to occur for this market to go down, e.g. collapse in US treasuries, commodity snap up (causing kind of a stagflation on one part of the economy - while deflation still persists in general) & the likes. In EW counting, it is also quite likely that the dollar is about to embark on Intermediate (2) down… not sure about this, but the last few months, the advance has been lacklustre.

There has been much about 2000/2007 parallels I have heard. How silly it was to be buying stocks during the peaks. But in late 1998-1999, if we were not buying, we would have been ridiculed by the brain deads. And sure enough… the brain deads outperformed as the rise preceding the collapse was parabolic. It happened to 2007 nickel & 2008 oil, too. Graphite the other day mentioned iron ore is the 2010 version of 2007 nickel & 2008 oil.

]]> By: Mike http://sovereignspeculator.com/2010/04/26/analysts-and-institutions-call-stocks-extremely-cheap/#comment-9003 Mike Mon, 26 Apr 2010 16:45:01 +0000 http://sovereignspeculator.com/?p=4486#comment-9003 Thanks, Roger. Sorry about the sparse posts. I'm 7 hours ahead of US markets these days and working on launching a website, so I don't watch things as closely as usual. Looks extremely toppy though. Commodities gone nowhere for months, there's sustained dollar strength, US bonds are holding up well... and the stock market is about as overbought, overbullish and overvalued as it as ever been. Thanks, Roger. Sorry about the sparse posts. I’m 7 hours ahead of US markets these days and working on launching a website, so I don’t watch things as closely as usual. Looks extremely toppy though. Commodities gone nowhere for months, there’s sustained dollar strength, US bonds are holding up well… and the stock market is about as overbought, overbullish and overvalued as it as ever been.

]]> By: rogerjarema http://sovereignspeculator.com/2010/04/26/analysts-and-institutions-call-stocks-extremely-cheap/#comment-9002 rogerjarema Mon, 26 Apr 2010 15:47:20 +0000 http://sovereignspeculator.com/?p=4486#comment-9002 Great post with great perspective. But nowadays, the post is getting very rare although we're entering arguably the most insane stages of this market rally. Great post with great perspective. But nowadays, the post is getting very rare although we’re entering arguably the most insane stages of this market rally.

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