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Wednesday, July 2, 2008

Brinker's Bull Market Turned Bear

What if Bob Brinker proclaimed a secular and cyclical bull market, a "favorable" outlook for 2008, predicted new highs, forecast the S&P at 1600's, kept all Model Portfolios 100% invested with stock market allocations.................................and a bear came to visit?

According to CNBC headlines, the Dow and Nasdaq are officially in bear market territory and the S&P 500 Index is inches away.


Brinker lowered his "all in" buy-level from mid-1400's to low-1300's. We are now at the mid-1200's. What's next?

EDIT: Almost immediately after I posted the S&P Chart, these questions and comments were posted:
Blogger shadowclone said...

Well, what can I say? Bob missed it completely and now we all lost 10-20 percent of our wealth. Did any body hear him on Money Talk this last weekend? What explanation did he give? Or did he just completely avoid any discussion of the stock market?

July 2, 2008 1:52 PM

Blogger Bluce said...

He's been avoiding it for months now, save for an occasional irrelevant comment.

July 2, 2008 2:03 PM

Here is what Brinker said on May 31, 2008:

STOCK MARKET BEARS.... Brinker said: “So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite.

We’ve had the market rising since mid-March. It’s rather significant when you stop to think about it. If you go back to mid-March and you take a look at the S&P 500 Index since mid-March, right now you have a total return, including cash dividends of about 10 1/2%.....................So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth? Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards. Truly amazing to see, and sad to see the people that are harmed by such unjustified negativity.”
Honeybee EC: Beginning the first week in June, Brinker began to connect the stock market directly to the price of oil on Moneytalk. He began to lay the groundwork for blaming the stock market correction on the oil-"wild card."

Finally, last weekend, he said it in plain English. He called it a "direct correlation." If you listen to Moneytalk, you can draw your own conclusions about his claim as to what he has been saying all along.

Brinker called a market bottom and a new buy level, bashed the bad news bears and said the market was in an uptrend. THEN, the market has the worst June in over 50 years and Brinker now says the following:

Brinker said: “Here on Moneytalk, if you have been with us, you know we have been talking about the importance of oil prices and energy here on our Moneytalk broadcast. And we see the importance of oil prices in today’s economy --we see it with a direct correlation. We saw just this week between rising oil prices and the stock market, with the S&P 500 trading at 1278 at this juncture. And we look at what’s happened to oil prices and they spiked to a new all-time-historic-record on Thursday and Friday, closing on Friday a little above $140 per barrel."

Kirk Lindstrom posted these important statistics in the comments section:
Correction Statistics for 07/02/08

S&P500 Chart
Last Market High 10/11/07 at 1,576.09
Last Market low 03/17/08 at 1,256.90
Current S&P500 Price 1,261.52
Decline in Pts 314.57
Decline in % 20.0%
Max Decline 20.3%
This means the correction from intraday high to intraday low is 20.3% and we are currently 20.0% off the peak.
The decline in the S&P500 from the closing high to the closing low is 19.4%

DJIA Charts
Last Market High 10/11/07 at 14,279.96
Last Market Low 06/27/08 at 11,214.37
Current DJIA Price 11,215.51
Decline in Pts 3,064.45
Decline in % 21.5%
Max Decline 21.5%
This means the correction from high to low has been 21.5% and we are currently 21.5% off the peak.
The decline in the DOW off the closing high to the closing low has been 20.8%

Last Market High 10/31/07 at 2,861.51
Last Market Low 03/17/08 at 2,155.42
Current NASDAQ Price 2,251.46
Decline in Pts 610.05
Decline in % 21.3%
Max Decline 24.7%
This means the correction from intraday high to intraday low is 24.7% and we are currently 0.213191637 21.3% off the peak.
The decline in the NASDAQ off the closing high to the closing low has been 24.1%


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