Wednesday, December 28, 2005

Choppy Market

The market action has been a bit choppy lately. I'm also seeing many more opinions and some are bullish while others are bearish. Normally you can get a sense of the overall opinion about the market, but not during these times. So far I've read one opinion that 2006 will be an average year, and another said 2006 will be a bad year (but you see opposite opinions). We subscribe to a few technical analysis reports and those are iffy on the market outlook as well. Some indicators seem bearish, while others seem bullish. For instance:
The indices are holding up above their moving averages, yet the put/call ratio is bearish. The market sentiment readings (what money managers think) is bearish since the ratio is high (it's a contrarian indicator). The different sectors all appear to be mildly bullish, but there are no cash inflows into mutual funds (there might have been more outflows I think). Two weeks ago the M2 (money supply) increased less than the inflation rate, which is bearish. There's a correlation between M2 growth and stock increases. Last week the reverse happened, M2 outpaced the inflation rate.

I think, from the technical journals I've read this week, the consensus from those managers seem to be that January may be pretty good, but then the rest of the year will be average.
If the year ends up this way, I think I should be able to beat the S&P again.

I have no opinions about Robert Kiyosaki (the author of Rich Dad, Poor Dad). I did see him briefly on PBS and he wasn't very impressive, but this was only for a few minutes so I can't form an opinion. I did come across this website/article where the author is against Kiyosaki and basically says he's close to a fraud. I thought it was an interesting read and the author spent a lot of time on it (maybe a little too much...)!

1 comment:

Anonymous said...

I think they're both medicore. Kiyoaski is extremely biased toward real estate and makes everything seem real easy without doing much work while John Reed is jealous of Kiyoaski's success and spends too much critiquing.