This graph shows the DJIA and the S&P500 are currently at bear market levels less then 2% above their July 2008 lows. I am sure Bob Brinker has his fingers crossed that the S&P500 does not make a fifth lower low in an ongoing bear market.
The NASDAQ is showing relative strength at 4% above its bear market low set in March 2008. The worry with the NASDAQ is it broke the potentially bullish trend of higher lows by making a low Friday that was lower then its July and August lows. Ideally, you like to see new bull markets making a series of higher lows. Now it looks like we are testing the recent market lows.
It was refreshing to hear bond guru, Bill Gross of PIMCO, tell he readers and people on CNBC last week that he was too early buying troubled bonds which has resulted in losses.
From Bill Gross's September 2008 Investment Outlook
Too bad for us and for everyone else who bought too soon. There are few of these deals now priced at par or above, which is bondspeak for “they are all underwater.”Don't you wish Brinker could admit similar mistakes and discuss them openly on his radio show?
Brinker Buy Levels:
This next graph shows Bob Brinker's Recent "All In" Buy Levels:
Despite recommending 100% in equities for his model portfolios one and two since March 2003, Brinker recommends dollar cost averaging "new money" into the market unless there is a decline to one of his "buy levels" where he then advises a lump sum investment.
Brinker's last five "all in" buy levels:
- March 2007 Special Subscriber Bulletin @ 1380
- Aug 16, 2007 @ 1411: Mid 1400s
- Feb 10, 2008 @ 1331: Low 1300s
- Aug 5, 2008 @ 1285: 1240 or less
- Sept 2, 2008 @ 1282: Low-to-mid 1200s
Last Market High 10/11/07 at 1,576.09=>This means the decline from intraday high to intraday low is 23.8% and we are currently 21.2% off the peak.
Last Market low 07/11/08 at 1,200.44
Current S&P500 Price 1,242.31
Decline in Points = 333.78
Decline in percent = 21.2%
Max Decline = 23.8%
=>The decline in the S&P500 from the closing high to the closing low was 22.4%
Last Market High 10/11/07 at 14,279.96=>This means the decline from high to low has been 24.2% and we are currently 21.4% off the peak.
Last Market Low 07/15/08 at 10,827.71
Current DJIA Price 11,220.96
Decline in Points = 3,059.00
Decline in percent = 21.4%
Max Decline = 24.2%
=>The decline in the DOW off the closing high to the closing low was 22.6%
Last Market High 10/31/07 at 2,861.51=>This means the decline from intraday high to intraday low is 24.7% and we are currently 0.211646998 21.2% off the peak.
Last Market Low 03/17/08 at 2,155.42
Current NASDAQ Price 2,255.88
Decline in Points = 605.63
Decline in percent = 21.2%
Max Decline = 24.7%
=>The decline in the NASDAQ off the closing high to the closing low was 24.1%
I did not get to listen to more than a few minutes of Moneytalk yesterday but I would expect someone still bullish like Brinker who was bullish and advising 100% of a portfolio to be in equities when the market was at 1565 to be telling his listeners to "hang in there" with the market now in the low 1200s. Did anyone hear any comments from Brinker to "hang in there" or "I was wrong to be so bullish at the top?"
I sure hope Brinker isn't thinking of selling near the bottom of the bear market like he did in 1988 when he sold and went to 100% cash when the markets were a similar level off the 1987 highs just before the market started a recovery.