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Thursday, June 26, 2008

Bob Brinker Fan Club Market Update - DOW down 19%

Bob Brinker has remained bullish and fully invested since March 2003. According to Bob Norton's June 21st "Bob Brinker Shadow Stock Market Timing Model," the model remains bullish as it tests recent March lows that were 20.2% off the all time highs.

A year ago, Bob Brinker wrote (see July 7-8, 2007 Recap) there is "no risk" of a bear market occurring this year.

As of today, the Dow Jones Industrial Average (DJIA or DOW) is 19.1% off its all time, October 2007 high on a closing basis and 19.8% off its overall all time high. Bob's "Bad News Bears" are close, but still no cigars.

Market Statistics for 06/26/08

S&P 500 Chart (Using Intraday prices):
Last Market High 10/11/07 at 1,576.09
Last Market low 03/17/08 at 1,256.98
Current S&P500 Price 1,283.15
Decline in Pts 292.94
Decline in % 18.6%
Max Decline 20.2%

This means the correction from intraday high to intraday low is 20.2% and we are currently 18.6% off the peak.

The decline in the S&P500 from the high to the low on a closing basis is 18.6%
DJIA Chart (Using Intraday prices):
Last Market High 10/11/07 at 14,279.96
Last Market Low 06/26/08 at 11,453.42
Current DJIA Price 11,453.42
Decline in Pts 2826.54
Decline in % 19.8%
Max Decline 19.8%

This means the correction from high to low has been 19.8% and we are currently 19.8% off the peak.

The decline in the DOW off the high on a closing basis has been 19.1%
NASDAQ Chart (Using Intraday prices):
Last Market High 10/31/07 at 2,861.51
Last Market Low 03/17/08 at 2,155.42
Current NASDAQ Price 2,321.37
Decline in Pts 540.14
Decline in % 18.9%
Max Decline 24.7%

This means the correction from high to low has been 24.7% and we are currently 18.9% off the peak.

The decline off the high on a closing basis has been 24.1%

From Bob Brinker's Asset Allocation History
June 2007 Marketimer: "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P500 index (1527.46). and following the January, 2000 closing high for the DJIA (11723), reached its conclusion on June 13, 2006 at the bottom of the mid-term off-presidential election year correction."
Excerpt from Mark Hulbert's June 2, 2008 Marketwatch article:
"Bob Brinker's Marketimer: Bullish. In his most recent issue, which was published in early June, editor Bob Brinker wrote that his market timing model "remains in favorable territory as we approach the start of the summer season. We continue to expect stock prices to work higher and to achieve new historic highs in the market indexes. Brinker's model portfolios are fully invested."
From Honeybee's May 31, 2008 Moneytalk Summary excerpts:

So what we have here basically, is an example of false prophets and it’s sad. And the reason it’s sad is the damage done. Think of the people that are looking today at the market, S&P at 1400 and they’ve been scared out of the market in the first quarter by these bears………It’s just amazing and yet these people are out there, and these people are not happy, I’m sure, to find themselves out of a rising market since March. To find themselves looking for ever lower prices when in fact we’ve had the opposite.
.

We’ve had the market rising since mid-March. It’s rather significant when you stop to think about it. If you go back to mid-March and you take a look at the S&P 500 Index since mid-March, right now you have a total return, including cash dividends of about 10 1/2%.....................So it’s fair for you to say to the Cassandras, where is that recession, where are those millions of lost jobs, where are the two quarters of negative real GDP growth? Where’s the bear market? …………The answer is, they blew it! That is the answer, they blew it. They got caught up in their own negativity and they pronounced that it was all over, it was going to spiral downward and there was no end in sight – and they got it completely backwards. Truly amazing to see, and sad to see the people that are harmed by such unjustified negativity.

Reality:

It is nice to see what looks like the start of rotation into technology stocks in the QQQQ as it has fallen less YTD than the DOW or S&P500.

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