(CORRECTION) A history of analyses of the bull market from mar09

Posted on Apr 28, 2016 by .

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This letter was damaged in its original transmission.  Here is the corrected version: Since mar09 we have constantly and consistently been bullish in our analysis.  This is not an exercise in egotism or 20/20 hindsight.  The purpose is to demonstrate how the tools of technical analysis functioned during the great bull market.  At this juncture it looks obvious to have been long since mar09.  But when the letters were written there was nothing on the right side of the chart.  So a contemplation of these letters and analyses should give readers confidence in the tools.  The links here will take the reader to calls made at the time.  All the letters are in the archives of the site.

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Bobbing for Apple…

Posted on Apr 27, 2016 by .

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0427aapl

http://stockcharts.com/h-sc/ui?s=AAPL&p=D&yr=1&mn=0&dy=0&id=p20970412253&a=456428947

That ugly gap on the chart is one of the reasons we don’t like to trade stocks.  Somebody doesn’t answer the phone and the stock wakes up down 5 or 6%.  But it is what it is and market insults result in a buying opportunity.  Apple has led nothing but a turbulent life with the pundits and Wall Streeet “owls” predicting imminent demise or, reluctantly, fabulous fortune.  The company attracts disdain and disrespect.  Before Apple blew everybody away with the iphone the internet tech community trolled the Apple user community in favor of Microsoft and IBM.

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07-08 top

Posted on Apr 22, 2016 by .

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The way to judge the quality of a market letter is to see what it said at critical juntures in the past. edwards-magee.com closed its long positions in the Dow in January 2008 and went short.

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Buying signals…

Posted on Apr 20, 2016 by .

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While we were wrapped hand and foot negotiating a really bad transaction with the Internal Revenue Service prices snuck out to the upside, making new highs.  New Highs are always inflexion points and represent a battle zone for contrarians and investors.  We bought more.

0420spx

http://stockcharts.com/h-sc/ui?s=%24SPX&p=D&yr=0&mn=6&dy=0&id=p38955316076&a=266398464

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The Voyage of the Bogle…

Posted on Apr 11, 2016 by .

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The voyage of the Bogle… (incomplete with turtles..)

 

We have previously alluded to John Bogle of Vanguard fame. He explained stock market returns with three simple factors: dividends (currently about 2.2%); earnings growth (historically about 4.7%); and speculative return (or amount investors are willing to pay for earnings (about 23 currently).  This model looks at earnings, not  dividends, which as we all know are subject to adroit legerdemain.  If investors get excited they can always increase the multiple they are willing to pay.

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