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Saturday, December 27, 2008

Bob Brinker vs Sy Harding

Bob Brinker has not made any NEW stock market forecasts or offered any predictions about where it might be headed in the coming year since he removed his last "new" money buy-in level in September. Perhaps he has decided it's better to say nothing than to repeatedly be so very wrong.

In the December issue of Marketimer, Bob Brinker explained that even though there is widespread fear of "financial Armageddon," he takes the opposite view. He said: "We continue to focus our efforts on the ongoing bottoming process that we regard as essential to establishing the level from which a sustainable market uptrend can occur."

There are other financial advisors who are willing to voice their stock market predictions. For example, Sy Harding, who recommends a "seasonal timing strategy," wrote the following on his free blog:

What's next?

As we've been saying for several weeks, the S&P 500 has experienced its largest bear market decline in 75 years, factoring in a recession at least as severe as that of 1973-74, which was the worst by far since the Great Depression.

But the market and the economy are two different situations.

Since the stock market looks ahead six to nine months, it usually begins to recover while a recession is still underway, in fact while a recession is still worsening. That also means that someone usually has to begin the buying that starts the rally and keeps it going for awhile. And in general that is not public investors. A hundred years of data shows investors are always extremely bullish at market tops, and extremely bearish and not interested in buying at market lows.

So what technicians look for in the charts and the money flows is an indication that institutions and so-called 'smart money' might be buying again, even as public investors are bailing out at their heaviest.

And we have seen the market rally quite impressively off its November 20 low, the major indexes up 15% to 22% since that low, even as the economic news and surrounding conditions have continued to worsen. It is probably temporary, but combined with the market's favorable seasonality, etc., it does tie in with our forecast that the market would see its low for the year in the October/November timeframe, and then a significant bear market rally that would be well worth going after.......

.......Meanwhile, I'm still expecting the market to be able turn this rally into a significant bear market rally in anticipation of the stimulus efforts working to prevent Armageddon, but for the bear market to resume in the market's unfavorable season next year, when it is realized that still further problems lie ahead that will have to be resolved........
The next short-term pattern is the 'monthly strength period', which is due to begin on Monday and to run through January 7th or 8th."

Here is a picture of a familiar sight to me -- my little hometown of Orland, California. Most of you will say "where?" but I have some readers who live in Chico -- just east of Orland.


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