November 1st, 2010

Digging for a Consistent and Accurate Market View?

This is what I love about the stock market: if you wait long enough or search hard enough you’ll find any point of view that you can agree with. But is that what you really need to help you succeed in trading this market?

What you need is a perspective that is both short-term and long-term at the same time. Opinion that you can rely on not changing direction 180 degrees with the jobs report or interest rate announcement.

I was struck by a recent headline from Bloomberg BusinessWeek (Bloomberg completed the acquisition of Business Week magazine from McGraw-Hill on December 1, 2009). But what really caught my eye were links to several opinions with a completely opposite point of view highlighted in a box to the right of the lead article.

I dug further and came up with a wide range of opinion pieces from a wide cross-section of institutions and analysts. I even found one institution (UBS) that distributed articles a couple of months apart (July and Sept) from different analysts with diametrically opposing projections.

Here are some of what I found:

Date Article Institution
28-Oct Fibonacci Chart Says S&P 500 May Reach 1,350 Bay Crest Partners
25-Oct S&P 500 Sell Signals Indicate Limited Gains: Charles Stanley (London)
19-Oct Bartels Sees S&P 500 Near ‘Key Resistance Bank of America
18-Oct Goldman Boosts 12-Month S&P 500 Estimate to 1,275 Goldman Sachs
8-Oct Leuthold Boosts Stock Holdings, Sees New S&P 500 High Leuthold
7-Oct S&P Shares Over 50-Day Average May End Rally Bespoke Investment Group
29-Sep S&P 500 Has Limited Room for Gains, UBS Says UBS
7-Sep Oppenheimer Joins Barclays 2010 S&P 500 Estimate Cut Oppenheimer
2-Sep Record Correlation Raises S&P 500 Vulnerability to Jobs Report PIMco
26-Aug Birinyi Says S&P 500 Bull Market Intact, Cuts Outlook Birinyi
18-Aug Worth Says S&P 500 Direction Is Coin Toss Carter Worth
2-Aug Bulls Redeemed as Birinyi, Shaoul See S&P 500 Rally Birinyi
28-Jul Credit Suisse Cuts S&P 500 Forecast, Stays Bullish on Stocks Credit Suisse
14-Jul ‘Sell Rallies’ Before S&P 500 Correction UBS
14-Apr Credit Suisse Raises S&P 500 Estimate 13% to 1,270 for 2010 End Credit Suisse

To avoid being whipsawed by the conflicting information you’re continually being subjected to, you need to find one source that you’ve found to be consistent and usually correct. Subscribers to Instant Alerts know that I’ve had basically the same view of the market’s near and long-term direction and have followed a consistent game plan in my own personal trading based on that view. To subscribe, click on the icon to the right.

Subscribe below or click here to learn more about help for navigating turbulent markets.