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Tuesday, June 24, 2008

Bob Brinker's Unexpected Third Market-Bottom Test

Analysis: Bob Brinker's Market-Timing, Posted June 24, 2008:
In February, Bob Brinker said that the stock market had bottomed on January 22 when the S&P 500 Index hit 1310. Brinker later said that the lows were "successfully tested" in mid-March. (The mid-March low was 1256.)
Based on what he has said, Brinker did not expect the market to test the lows again. He clearly stated in Marketimer and on Moneytalk that he expected the market to continue its upward trend. He said that AFTER the S&P had risen almost 10% from its March lows. (See May 31, 2008 Moneytalk Summary.)
Moneytalk, May 31, 2008, with the Dow at 12, 638, the S&P 500 Index at 1400 and the Nasdaq at 2522, Brinker said: “……..And probably a lot of those people got scared out near the correction lows. The initial correction low in January, which was successfully tested in mid-March, before the market reversed and resumed its uptrend.
Excerpt from Mark Hulbert's June 2, 2008 Marketwatch article:
"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes." Brinker's model portfolios are fully invested."


This past weekend, Brinker had absolutely nothing to say about the stock market except to give the closing numbers. What are people saying?
Jumpnjoey said:
"Wonder how those that followed his "all in" buy call at 1450 are feeling right now?

S&P 500 is the same where it was 20 Apr 06.

792 days of nota or 2.17 years.

Better off in a money market account. Didn't Brinker use to bash the school of hold and hopers?"
Sir Pig Esq. replied:
Pig said...

Didn't Brinker use to bash the school of hold and hopers?

At one time or another, Binker bashed quite a few people, more than the Bashers here have ever done.

He bashed "Buy and Hope" (and pray), but to this day is HOLDING the QQQQ, and quite possibly TEFQX.

NOONE knows about TEFQX, since the trade was made with disappearing ink, and NOONE can find it anywhere. A real stumper for sure! (((ROAR)))


Honeybee replied to Joey:

Yes Joey, he certainly did bash the buy and hopers. I think he called it the "Church of buy and hold."

Amazing that two years+ have gone by and the S&P is back where it was in April 2006.

It's interesting to note that in June, 2006 (the month Brinker claims a secular bear megatrend ended), his buy-level was at 1250, and he was calling for the S&P 500 to reach new highs.

Now that was a very good call because the S&P did reach new highs in October 2007.

But -- the big one -- in October 2007 as the market was at its all-time-record-high, Brinker was calling for more new highs and the S&P to reach mid-1600's.

So, long story short: He rode this correction all the way back to April, 2006 level -- as you pointed out.


Dan said:

Blogger Dan said...

Brinker riding a horse? Can't picture that, but I can picture him sitting on the edge of his chair this morning watching the Dow test those March 2008 lows.

Because if the Dow breaks them, S&P is almost sure to follow. And if it does, as S&P drop from the top of 20% or more is extremely likely. And that would mean he missed the sell call of a bear market.

So far the Dow has met the challenge. I'm one that hopes it passes the "test", as I still have a few stocks (bought yesterday) and mutual funds (though not much $ in either anymore). And one can usually make a lot more money in a bull market than in a bear. But the market will do what the market will do. We should know by the end of the day--certainly by the end of the day.

June 24, 2008 7:51 AM

Dan said...

So far the Dow has held above its March closing low and just may survive this "test". The S&P has a way to go before it enters "test" territory. If the Dow does survive the test as it is right now, we may, just MAY be in the clear. Bob must be clenching his fists right now. He's got a lot riding on this call (or lack of one).

June 24, 2008 8:40 AM


Honeybee said...

Hi Dan,

Yes, I think a lot of us are sitting on the edge of chairs this morning and hoping that these March lows hold.

(The S&P isn't quite there yet, but it's definitely at Brinker's "low-1300" attractive-for-purchase with all new money level.)

Personally, I'm rooting for Brinker on this one. He called a market bottom back in February, and later said it "tested" in March.

Unfortunately, the market didn't continue it's upward trend from the March lows, as he clearly expected as of just a couple of weeks ago.

But hey, one more test won't kill us -- IF, that is what it is... 8~)

June 24, 2008 8:40 AM


Followup comments after market close:


DanG said...

It's hard to know if the Dow passed its "test" today. No new low, but it did turn a nice gain into a modest loss in late trading.

Tomorrow is "Fed Day" so you may want to watch the fireworks (or lack thereof) along about 11:15 AM PDT. Very unlikely they'll do much of anything, but they may open their mouths and stick their feet in them. Hopefully not. But as I've always said, "hope" and $1.20 or so will get you a cup of Starbucks! What will be will be.

June 24, 2008 2:33 PM


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