SOS Long or Short, Bull or Bear

Bull or Bear Scorecard for Share Market is USA

Why BEAR

• Fundamentally (overvalue high PE, lowest dividend yield in history, future GDP growth for next 10 yrs predicted by Gary Shilling is about 2% p.a. vs past 20 years is 3.3%);
• Based on Elliot Wave Theory, considering the social mood and past trend analysis (with high probability of accuracy) is calling a deflations in most asset class, including equity
• Based on Leading and Lagging Economic Indicators is berish because the main problem is the consumptions reduction (70% of GDP or USD10 trillion, unemployment persist, saving rate increase, consumption drop, no major new borrowings or bank lendings) and deleveraging of debts (USD45 trillion) and derivatives (USD200 trillion)

Why BULL

• The worst is over, based on the bullish indicator
• Confidence is back, the financial crisis is stablised
• Daily Sentiment Index is bullish
• Stimulus plan by government will pump lots of money in the market
• Liquidity have improved
  

MyView

Few factors we need to consder seriously:

1. consumer consumption capability, sustainability of USD10 trillion
   
2. deleveraging of private debt of USD45 trillion
3. deleveraging of derivatives of USD200 trillion
4. effectiveness of stimulus plan (bailouts, buying toxic assets, cash for clunker)

If we seriously think that the 4 factors above is resolved and can be back to normal, the it is a long term BULL, if not it will likely be a long term BEAR.