SOS Fundamental vs Technical?

Baltic stock market goes up 120% after it takes the opposite stands compare to DJIA increase of 74%. Did massive stimulus actually good for the economy?

1. Can fundamental analysis compared with technical analysis?


2. Is fundamental analysis more objective then analysis?


3. Are there subjectivity in fundamental analysis or technical analysis?


4. Is there guidelines or rules in fundamental analysis?


5. Does fundamental analysis provide better probabilitic forecast than technical analysis?

Find your answer here, by Robert Prechter.

Question

I have seen CNBC interview Steve Hochberg a couple times now. It seems that the interviewer is always trying to discredit him and Elliott wave. That's not usually the case when another guest suggests a bearish future. Am I interpreting that correctly? If so, I assume you guys are used to skeptics, but how do you address the argument that Elliott wave analysis is too subjective for reliable projections?

Answer

I always ask, “compared to what?” There is no group more subjective than conventional analysts who look at the same “fundamental” news event -- a war, the level of interest rates, the P/E ratio, GDP reports, you name it -- and come up with countless opposing conclusions. They generally don’t even bother to study the data. Show me a forecasting method that is totally objective or contains no human interpretation. There is no such thing, even in a black box. To answer your question more specifically, though, properly there should be no subjectivity in interpreting Elliott waves patterns. There is a set of rules and guidelines for that interpretation. Interpretation gives you only the most probable scenario(s), not a sure one. But people mislabel probabilistic forecasting as subjectivity. And subjectivity or bias can ruin that value, just as in any other approach. Sometimes we screw up. But in contrast to the outrageously improbable (if not downright false) wave interpretations or other types of forecasts we often see from others, we are as close to an objective service as you’re going to find. We hire analysts who know the rules of Elliott cold.

MyView

Can we actually trust financial analyst these days. I read an international financial analyst wrote a report for a listed company. One of the charts is showing the past two years of the broker's target price vs the actual share price. And oddly, 95% of the time of the target price was not achieved. Never mind about whether it is achieve or not, but the fact the target price changes from RM12.00 each to RM3.00 each within 2 years period is astonishing.

It speak how much about fundamental analysis, the chart proved that its forecast projections using fundamental analysis with linear mindset is a fallacy.

So can we said that fundamental analysis is more objective or technical analysis?

Don't believe what you see or what you here, observe, examine and experience it, trust your own instinct.

SOS Double dip?

Any chances of double dip in the US stock market? Some says, No, just look at the

• corporate earnings
• manufacturing index
• consumer index
• stock market index
• sentiment index

Some say, Yes, likely a double dip because

• housing still weak
• refinancing of commercial properties is due USD0.5trillion
• unemployment stagnant
• credit did not grow
• derivatives problems still unresolved
• government deficits is not sustainable

MyView

If we study the reasons above carefully, one is talking about the past, the other is talking about the present and future. The double dip basically relies on the present and future variables, not so much on the past. After all, it is questionable whether the past reasons are sustainable?

SOS does your central bank set interest rates?

The two charts above, one is central Bank of Japan, another is Fed, it proved the fallacy of the myth that central banks set the market interest rates, actually, they just follow the market rates, period.

So when economists argue that the Fed set the rate to a low, actually, Fed just follow the market rates.

It is not so much of what school does we attend, it is more important we get a good education. It is not easy to know the truth nowadays as the medias always gets the limelight, hence, we naturally live in delusion, except for a few.

How then to avoid living in delusion?

Well, this cannot be help, it is predestined. Some are searching high and low, to fulfill their emptiness in live, to satisfy their body, mind and soul.
Perhaps one may want to read, www.falundafa.org, which may assist one to enlighten to many life's issues.

SOS More to go?

Is the overvaluation of DJIA sustainable?

Even with the following problem:

1. unemployment at 9,7%
2. housing still in a shamble
3. commercial properties joining the game
4. derivatives problems not resolved

The DJIA has went up almost 80% from March 2009 to April 2010, how much more can it go?

Well, from a big picture perspective, it definitely looks like a bear market to me, factually, it is a given, however, until the emotional bullishness run out of steam, be very very cautious.

MyView

Sell in May and go away is the best suited for 2010. The risk is definitely much higher than the reward. Even if we leave the fundamental facts aside, Elliote wave charts indicates the stocks are toppish now.

SOS Iceland and Goldman Sachs

This is the start of DJIA. April 14, 2010

SOS Laozi

"Some lose yet gain, others gain and yet lose." — Laozi

"True words are not fancy. Fancy words are not true. The good do not debate. Debaters are not good." — Laozi

"The way of heaven is to help and not harm."

"Do you imagine the universe is agitated? Go into the desert at night and look at the stars. This practice should answer the question."

"When things flourish they decline."

"The more laws and order are made prominent, the more thieves and robbers there will be."

all streams flow to the sea because it is lower than they are. humility gives it its power. if you want to govern the people, you must place yourself below them. if you want to lead the people, you must learn how to follow them." — Laozi (Tao Te Ching)

SOS sell sell sell !!!

Bob Prechter said on 13 April 2010

Bonds top in Oct 09

Gold top in Nov 09

CRB top in Jan 10

US bottom in Dec 09

Stock top in ??? Apr/May 2010?

This is the best opportunity to sell since

Year 2000; and

Year 2007

Keep cash or cash equivalent!

MyView

Sell and go away for a while, 6mths to a year. Then gradually buy when the whole world is pessimistic. This will be one of the best opportuinity.

1. consumer spending did not improve
2. housing is still weakening
3. commercial property debt is due for refinancing (0.5trillion)
4. unemployment still high
5. debt level did not improve much, merely transfer to the public sector
6. nothing was done on derivatives

You can figure out the rest for US stock market.

SOS How significant are you?

Do we sometimes wonder how significant are we from the bigger planet/star perspective? Just look at the four picture and it will make us think, are we that significant?

SOS Few things to know

What has not change

• CDS is still unregulated


• Derivatives rules remains


• Housings still dropping


• Commercial property still dropping (Haft a trillion is due and many are securitized)


• Unemployment did not improve much


• Consumers purchasing powers weaken

So, it is about time another bubble will implode, April to June 2010?

SOS Let it be.....

Let it be........... let it be ..... let it be....

If fate thinks its yours it will be yours, if fate thinks it is not yours it will not be yours

March to May 201o will peak, after that, CRASH...................................

The best place to be with now is CASH

Look at the DSI chart.

SOS What effects the market?

Is there a catalyst?

Look at 2007 in USA, the mood change before Lehman blows up in Sep 2008.
Look at March 2009 in USA, is the stimulus cause the stocks to go up, nope, it is the social moods.

Social moods basically is patterned, hence it is predictable. The tool to study social moods is Elliottewave principles.

Events happens arising from the social moods, earnings, interest rates, mortgage collapse, unemployment etc.

SOS Invictus

Invictus

Out of the night that covers me,

Black as the pit from pole to pole,

I thank whatever gods may be

For my unconquerable soul.

In the fell clutch of circumstance

I have not winced nor cried aloud.

Under the bludgeonings of chance

My head is bloody, but unbowed.

Beyond this place of wrath and tears

Looms but the Horror of the shade,

And yet the menace of the years

Finds and shall find me unafraid.

It matters not how strait the gate,

How charged with punishments the scroll,

I am the master of my fate:

I am the captain of my soul.

A short poem by the English poet William Ernest Henley

SOS Short or Long?

Why short?

Everyone else is bullish.

Why long?

Everyone else is bearish.

We hardly hear that the majority got rich or got it right. That is a fact.

MyView

It is a heartache to know that in the investment world, no matter how knowledgeable you are, when your investment returns is weak or not profitable, you are deemed to be not a smart investor, because the only measurement is the result, i.e. how much did you make?

However, a lot of people claim to be winner before they end the game. Remember, the stock markets never ends, only the investor. For me, until one stops investing in the market, he or she must tally up its gain or loss. Of course, it is very hard to compare with each other because each has different starting line. More importantly, it is the finishing line is important, that is the time you liquidate all your shares into cash and does not continue to invest in share markets.

Hence, investment in share markets can actually be a lifelong marathon. It is an interesting game in fact, just enjoy the journey as well as the destination.

SOS Gary Shillings Recession Over?

By Gary Shillings on 1 April 2010

Four (4) pillars one has to look at from the positive economic figures due to item (1) but items 2-4 is not convincing:

1. Unwinding of inventories
2. Housing not rebounded
3. Employment still weak
4. Consumer income is weak

Gary is not pessimistic, he is just a realist.

08 - did well (13 predictions achieved)
09 - flat

If you drop 90% in 08, and double in 09, you are still 80% down.
If you drop 80% in 08, and double in 09, you are still 60% down.
If you drop 50% in 08, and double in 09, you are still 20% down


For 2010

1. Long USD
2. Long Bond
3. Selective and long high dividend yield stocks