Correction is over 10% intraday. Companies reporting good numbers. I say all leg ups will start out a little slow but it is time for the next one. Big bounce back last year and little engine that could this year. Greatest country in the world. All will follow or will be left behind.

I’m not sure if I fit into the category of people that you are talking about (those who are looking for a correction), but I am/have been bearish. For clients who are interested I tell them that while I am not in the business of predicting market movement, I would say that it is far more likely that the market at best is flat with a lot of volatility and at worst will see another serious correction (serious meaning >1000-1500 from 10300 on the Dow), with a continued run  up in the market extremely unlikely.

As for the timing for when I change that opinion or feel like all of the worst is behind us (and thus become bullish again), I can’t say that I know that. I feel like it will be a “I know it when I see it” moment. There are too many headwinds and skeletons in the closet to feel like we have seen the last of the serious challenges. Too many of the sheep are hanging on the hopes of hollow glimpses of economic  good news and ignoring some of the looming storm clouds to feel good about buying into a “bull market”.

My real fear in the market is that some issue that most people that are paying attention know about (commercial real estate default and their effects on bank balance sheets) blows up in somebodies face, then all we will see is CNBC plastered with more doomsday programming, thus spurring a severe selloff. Rational people know that we are in a precarious but survivable position, but if the sheep get involved we all could be shoved into the abyss.

[quote=Moraen]So what is the time frame for the correction to occur (for those of you who see it coming)? 

In January, it was “by March”.  March is in a few days.  So we’ll say Monday. 

What I’m trying to see is if (like me) you will admit you were wrong if it doesn’t manifest shortly.

Btw - when people were asking for general market predictions, I did say that 2010 would be flat, but a great buying opportunity for individual positions.  And halfway through 2011. 


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It’s tough to say when it will happen.  I’ve been waiting for a few months now.  I wish I had a crystal ball, but I don’t and that’s what makes things interesting.

I never tell clients to “expect” a pullback.  I only tell them where I think fair value is and what the risks are by being over/under weight certain asset classes.  If they agree with me, then we will make changes to their portfolio accordingly (get more aggressive if we agree equities are undervalued, get more defensive if we agree equities are overvalued).  I think equities are very overvalued right now.  Fair value on S&P in my view is 900.  Can stocks continue to run here?  Absolutely.  But I’m not going to put capital at risk to find out. 

I will say I’ll be very surprised if the S&P is trading higher than it is now (~ 1100) on Dec 31, 2010.  I don’t believe equities can support the current multiples given unemployment and consumer spending levels.  You can hold me to that, Moraen. 

I absolutely agree that it is a stock picker’s market right now and there is value out there if you know where to look.

Correction is over 10% intraday. Companies reporting good numbers. I say all leg ups will start out a little slow but it is time for the next one. Big bounce back last year and little engine that could this year. Greatest country in the world. All will follow or will be left behind.

So what is the time frame for the correction to occur (for those of you who see it coming)? 

In January, it was “by March”.  March is in a few days.  So we’ll say Monday. 

What I’m trying to see is if (like me) you will admit you were wrong if it doesn’t manifest shortly.

Btw - when people were asking for general market predictions, I did say that 2010 would be flat, but a great buying opportunity for individual positions.  And halfway through 2011. 

This is a pretty good blog, politics aside:

[quote]I was bearish for 3 or 4 months (Rosenberg and the other bears got into my head)…[/quote]  [quote]About a month ago, when the Dow turned intra-day from being down about 180 to finishing up about 20, I decided that the news was out there and the market just kept shrugging it off…[/quote]  [quote]I started dollar cost averaging in that next week…Both into individual stocks and equity funds…[/quote]  [quote]If I get a pullback, I am fine with it since i still a couple of rounds of buying before the allocations will be set…[/quote]  [quote]I think I decided that we are out of the woods as far as the system falling apart goes…and the questions are more about earnings and earnings growth rates…But, I am OK with that uncertainty, as opposed to the who is next to go under uncertainty of a year ago…  [/quote]    
I have no idea why this respoinse got broken down into different shaded sections…whatever…
  

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