smart-money-report.com Blog

Joey Keasberry has a bullish take on SMR Portfolio stock, Taseko Mines (TGB).

The good news is that American Home Mortgage opened for trading this afternoon. The bad news is that American Home Mortgage opened for trading this afternoon:

A couple of points. Don’t let anybody tell you that a stock can’t go lower. It can. It can go to zero. Also, these things don’t come out of the blue. There are warnings. AHM has been screaming sell since about February.

But, wow, even Enron didn’t crater this fast.

It’s been a long, long time since I’ve heard anything about the Coppock Guide, but I found this to be interesting from John Hussman’s weekly commentary:

Other interesting measures of “overbought” conditions are also worth noting. Last week, Jim Stack reviewed an observation that a technician named Don Hahn made in the 1960’s about the Coppock Guide (a measure of price momentum based on the 10-month smoothing of the averaged 14-month and 11-month rate of change in the S&P 500). He observed that when a double-top or “wave” occurs in this measure, without falling to zero between those peaks, “it identifies a bull market that hasn’t experienced any normal, healthy washouts or corrections. That’s a runaway market usually headed for disaster. This double-top has occurred only 6 times in 80 years.” Those instances, and the subsequent market losses were: October 1929 (-86.2%), May 1946 (-28.8%), February 1969 (-36.1%), January 1973 (-48.2%), September 1987 (-33.5%), and April 1998 (though followed by an 18% market correction by October 1998, the subsequent recovery produced a third “shelf” in the Coppock Guide by 2000, and the market lost nearly half its value between 2000 and 2002).

I haven’t heard from Dr. Doom in awhile. And, as you might guess, he’s feeling a little doom-ish. i certainly agree with this (H.T. The Kirk Report):

“On any further severe market weakness the Fed and the Treasury will come up with some hyper-inflating tricks.”

Where’s the Plunge Protection Team when we need them? Unfortunately, I’ve forgotten the secret Plunge Protection Team handshake. But one thing’s for sure, at  times like these the conspiratorists will come out of the woodwork (H.T. The Kirk Report).

From Mark Arbeter of Sandard & Poor’s Equity Research:

If the S&P 500 falls through support in the 1440 to 1465 range, things could get very ugly, very quickly.

I’m afraid I agree. I made a similar point on the Member’s Site this morning. The S&P closed today at 1455.27. So it’s right there.

Alex Bossert makes a bullish case for SMR Portfolio stock, FreightCar America (RAIL). I like it because it’s a good business selling at a bargain price.

Hard Assets Investor on innovation and the commodity investor.

Kevin Depew with his daily “Five Things You Need to Know.” This may not be “the end,” but right now the bears are in control.

Teresa Lo reminds us of the nature of market tops. Especially take note of her reference to Justin Mamis, who has done the best work of anybody I know of on the subject. Mamis from July of 1987 (remember what happened in October?):

Everyone kept saying ‘a top is not in place yet.’ They persistently pointed to the ‘normally reached’ levels of this or that statistic that were not yet there to reinforce their desire to remain bullish. … Apart from statistical measures of increasing blindness, this unwillingness to acknowledge what they themselves were already feeling revealed a comfortableness, a confidence, a conviction that whatever was happening – short-term survivable dips – would continue … until ‘the top,’ like a strip tease artiste of our youth would with decorum appear on stage, bow, and then, accompanied by applause from all the bulls eager to cash in on their excitement, would begin to twirl its statistical tassels in front of everyone.

I’ve gotten so old I can’t remember the names of those ladies at the Old Howard, but I can remember that all you got was a flash of this or that, before they waltzed off. Stock market tops are like that. You know it’s there somewhere if you squint hard enough, but you never quite see it, so you keep waiting for more. And then, in the end, as the curtain comes down on the bull market you realize that the one rule about tops is not that they provide this or that signal, but that they come before anyone is ready. — July, 1987, The Philosophy of Tops.

Yep, that’s the way they happen.