The recent ISM surveys of manufacturing and service industries showed a pick up in New Orders. This has pointed to acceleration in GDP growth in the past . . .

| January 8, 2012

The ISM surveys are issued monthly to measure various business activity for both manufacturing and service industries.  One indicator is the New Orders Index which I display below since 1997.  It is considered to be indicating expansion at values above 52.1.  The recent pick up in orders is consistent with viewpoints that the U.S. economy […]

2011 felt like a bear market and mostly it was – just ask the BRICS, the Europeans and small cap technology investors . . .

| January 3, 2012

Now that 2011 is over the financial press is sifting through the data to see what can be learned from the 12 months just ended in order to forecast the 12 months ahead.  You all probably have read that the Dow was up “6ish” percent, the S&P 500 was “flatish” and the NASDAQ was down […]

The spread between the S&P 500 earnings yield and the 10 yr. Treasury remains near an unprecedented high – is mean reversion on the way and what does that imply? . . .

| January 2, 2012

The following note is a refresh of the chart I have presented in the past here, and the post I made in August here.  The chart below displays the 10 year Treasury rate vs. the S&P 500 earnings yield and a histogram of the spread between the two.  In modern market history there was only […]

10 Rules for investing in tough markets – Bob Farrell’s wisdom still applies today

| January 2, 2012

Bob Farrell spent several decades as chief stock market analyst at Merrill Lynch & Co. He had a front-row seat at the go-go markets of the late 1960s, mid-1980s and late 1990s, the brutal bear market of 1973-74, and October 1987 crash. Farrell retired in 1992, but his famous “10 Market Rules to Remember” have […]

Retail investors continued to flee equity mutual funds for an unprecedented 4 years in a row . . .

| January 2, 2012

Retail investor inflows and outflows from mutual funds are classic contrary indicators.  Retail investors are the “wildebeests”.  2011 saw the 2nd highest rate of equity fund withdrawals on record.  It is no wonder that the equity markets had a tough year in 2011.  The withdrawals had the greatest impact on smaller cap stocks as Aberdeen […]

The Tech Pulse is rising, latest growth best since August 2010 . . .

| January 2, 2012

The Tech Pulse prepared by the San Francisco Federal Reserve (here) continues to rise albeit at a slower rate than in 2010.  The Tech Pulse has a 72% correlation (quarterly data) with the NASDAQ since 2003 and an 80% correlation since 2008.  The data from 2003 shows that when the Tech Pulse has grown as […]

Improved consumer confidence could see U.S. stocks 20% higher in 2012 . . .

| January 2, 2012

Amid the fear driven market activity there has been a remarkable improvement in consumer confidence. The degree of improvement somewhat mimics that seen coming out of the bottom in early 2009.  Rising consumer confidence has been at least coincident with rising P/E multiples in the past.  The analyst responsible for the following charts, Prieur Du […]

Leading indicators are still trending up going into 2012 . . .

| January 1, 2012

Despite the ECRI’s bearish call last month forecasting the U.S. will slip into a recession in 2012– the leading indicators including the Conference Board numbers are still pointing up.  The following chart comes from  Jeb Terry, Sr. January 1, 2012 Aberdeen Investment Management – a guide service for micro-cap technology investment