Ralph Acampora was on CNBC Europe predicting a 20-25% decline in the US market from the high of the year which he says is looking like was put in at the May high. He is concerned about the shift in leadership away from small caps (something Barry Ritholtz mentioned recently as well).
He said the S&P 500 was down 8% from its May high. Taking yesterday's close of 1285 makes it down 40 points from the high which is closer to 3%, so that was a little confusing. He thinks there could be a rally first. The recent low was S&P 500 1220 so we have already rallied 5.3% (to yesterday's close).
Despite that confusion the call is a 20-25% drop from the May high. Ralph has been one to stick his neck out (kudos) over the years. I'm not sure that he is right a lot (anyone with that info can leave a comment). I know that he has been both right and wrong over the years so I am not sure how much stock to put in this call but plenty of people do care what he thinks and I don't know if this will make its way to regular CNBC.
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13 comments:
Well, he was right about 1998 but he also made some widly bullish predictions ("super bull market") that never materialized.
He top ticked the Tech Bubble by calling for Nasdaq 6000 when it went through 5000. Speaking of blasts from the past I saw Joe Battapaglia sounding all bearish on Kudlow a few weeks ago. So another contrarian indicator for da bulls.
Yeah....I've noticed CNBC shoving a Bearish AGenda down our throats lately.
I think they "feel" guilty for their wildly BUllish view '99-'02.
...I can still see Maria pumping and dumping all the way...
If they ( incl. Acampora ) are bearish now......well...I've seen this movie before.
g
As a counterpoint, Abbey Joseph Cohen (Goldman Sachs) was on CNBC USA this morning and she has become MORE bullish; raising her year end S&P estimate to 1400. This is similar to predictions being made by marketimer Bob Brinker although his time frame goes into 2007.
So, I guess ya pays yer money and ya takes yer choice.
If Abbey Joseph Cohen is bullish, then sell everything you have!
Just joking (although!).
To be more serious, The retracement that usually occurs after a first fall and just before the real bearish move is about to end soon. SPX 1310 should be the upper limit and in 5 days, the market should go down steadily with occasionnal rough rallies (however with no higher high as we have experienced lately).
Now for that fantasy of a 25% breakdown, there is much to speak about.
People want desperately to see a similitude between 1987 and today. They are not the same cycles. 1987 was at the end of a weekly cycle that had not "given up" much at the end. Therefore it gave up in a jiffy. Abruptly and in a "weekly" manner. Now (2006), we are only half way of the weekly cycle.
Which means that it will not be as rough.
In 2000, we were almost in the same configuration.
In 2000, the SPX500 went 12 more weeks on a "sideway" upward move before it collapsed.
WHY this time should be different and what are the scenarii?
Blogging might be the reason why the market falls faster than in 2000 and it is a pretty good catalyst!
People are more aware of what is going on and will answer to the market a lot quicker than in 2000.
The scenarii:
It breaks up next week.
Or
It breaks up in 6 weeks or so.
Or
It breaks up in 12 weeks (like in 2000).
Market takes time.
In any case, it should not go much further up. Another sideway kind of up.
So good old Cash might be a good way to wait for the confirmation of the trend.
good stuff here everyone.
Oldsoothsayer, are you a Gann guy?
Your specificity makes me think yes.
Oh!
What is the confirmation of the trend?, I hear.
Well!
With your little stash of cash on the side, you wait for the market to "break" next week. If the first rally does not bring a higher high, you then put the cash, the house, the farm, your wife, kids and dog on a 6 weeks put. I will wait for you in the Island and we will pop corks of the best wines ever made and get that ultimate high we are all after.
Aren't we?
Yes I am Roger.
good stuff OSS
This mkt was coiled for a rally. Right at resistance,multiple tests of a support level, bullish divergence btw price and oscillators, and stochastics not near overbought. Nasdaq was a screaming buy weeks ago when it failed to penetrate the neckline. Anybody could have seen this coming. Then again, after it happens easy to see a slew of predictors and a pattern emerges. If the mkt has all the structure, cycles, and waves that we look to see then why is market timing so unsuccessful? For me, I'm flush with cash not wanting to give up my early gains. And, it is really hard to sit out a rally. I did the same in January; efa would have been such easy money. Indeed this could be a similar 10-15% pop even if we fall back to a 300dma.
What did Ralph A. say about foreign markets, anything? Is there going to be a split world market?
I was actually on that Kudlow with Joe Baggadonuts.
When he said that he Joe was Bearish, I spit my water out, and said that if he's a Bear, than i gotta start buying stocks.
For a good laugh, see some of the comments here
OK, I can't get enough unintentional comedy (footnote to Bill Simmons the sports guy for the term) from Joey Bats.
Ralph said that the DAX, CAC and FTSE look stronger that the US markets.
If had to guess based on they way he reacted to being asked about foreign I would say he does not study them anywhere near as closely as the US.
If that is wrong, apologies.
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