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Bob Brinker went into 2008 as bullish as he had been throughout the 1990's. He thought the correction in October, November 2007 had "restored health" to the stock market. He did not expect this deep correction. He had been predicting new highs and the S&P 500 Index into the mid-1600s for several months.
After the market dropped 15%, Brinker did away with the "attractive for purchase in the mid-1400's" buy signal. Here is an excerpt from what Brinker said on January 20, 2008 -- recommending only dollar-cost-averaging until a bottom is established: "Although our sentiment indicators are in favorable territory, we note that selling pressure has increased, which calls into question the area at which a bottom will develop. We recommend a dollar-cost-average approach for new stock market investing until a definitive bottom area is established."
Peter Brimelow published a major portion of the special bulletin that Brinker issued on February 10, 2008 where Brinker called a new bottom and issued a new "attractive for purchase" buy level of "low 1300s or below." Brimelow wrote:
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“All of them (“Bold Bulls”) seem shaken by the economy's deterioration, but still positive long-term. Brinker said recently: "Marketimer views the establishment of a correction bottom as a process which unfolds over a given period of time. This process involves the initial establishment of a closing S&P 500 Index low, followed by a short rally, followed by a test of the area of the previously established low on reduced trading volume. The initial closing low in the current stock market correction process occurred on Jan. 22, when the S&P 500 Index closed at 1310.50. The market subsequently rallied for eight days, at which point it began the process of testing the area of the Jan. 22 closing low."
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"In our view, the correction bottoming process has proceeded with a high degree of historical consistency to date. We have witnessed a decided reduction in selling pressure during the testing process, which is essential to a successful outcome. We now rate the stock market attractive for purchase on any weakness that occurs in the current area of the S&P 500 Index low 1,300s, or any minor weakness that occurs below that level."
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http://www.marketwatch.com/news/story/bold-bulls-bloody-unbowed/story.aspx?guid=%7BEC77C4E7%2D96CB%2D4BDC%2DAD15%2D2DC81C4ECB51%7D.
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The following data from Marketwatch:
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The Dow Jones Industrial Average (.DJI) ended Friday with a drop of 315.79 points, or 2.5%, finishing at 12,266.39. It's loss for February was 3%. The broader Standard & Poor's 500 Index (.SPX) lost 37.05 points, or 2.7%, to close at 1,330.63 on the day and mark a monthly loss of 3.5%. The technology heavy Nasdaq Composite (.COMP) lost 60.09 points, or 2.6%, on Friday to close at 2,271.48, a 5% loss for the month. The Nasdaq has dropped 14.4% so far this year and is the worst performing of the big three indexes..
Outstanding Bob Brinker commentator, Will L., asks, "How Stupid Was That? Will Wrote:
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"In 2000 Brinker told a caller who wanted to buy oil stocks "That would not be my recommendation. There's plenty of oil and it is no longer important in our economy"--oil trading at about 10.00.
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How stupid was that?
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Throughout his career (until a rather dishonest claim that came up this year) Brinker talked down to people suggesting they might buy gold or gold stocks. Today gold is closing in on 1,000. vastly outperforming anything Brinker has come up with.
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How stupid was that??
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Brinker urged people to ACT IMMEDIATELY with up to 1/3 of an entire portfolio to buy QQQs in the 80s in OCT. 2000. He has never closed out that trade and today they trade in the low 40s--still down by 50% going on EIGHT YEARS LATER. How STUPID WAS THAT Brinker called a "go all in" moment at 1450 on the S&P a few months ago.
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How STUPID WAS THAT?
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Yesssirreee that Bobby is really "sumpthin""
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