Elaine Garzarelli Bullish - S&P500 Target

Like Bob Brinker, market timer Elaine Garzarelli remains Bullish according to Dan Dorfman in his article "It's Still a Go-Go Market!" She remains bullish but sentiment suggests we could have a correction at any time.

Her overall view, as exemplified in a commentary she just fired off to clients: it's still a go-go market.

The chart below shows the S&P500 is currently at 1208.64 so reaching Elaine Garzarelli's target of 1315 would be a gain of 8.8%.

Sentiment is too bullish so a 4 to 7% correction now would not surprise her:

One of her indicators, though, a contrary indicator that focuses on sentiment, is flashing a distress signal. In brief, the number of bullish investment advisers has been rising steadily, a development that often precedes a market sell-off). Accordingly, Garzarelli says she wouldn't be surprised to see a consolidation or a normal 4% to 7% correction at any point. But such a correction, she observes, would be an opportunity for investors to add to their stock positions.

This contrary sentiment indicator she is talking about the Investors' Intelligence Bull Bear Survey. I track this in my newsletter and used it to buy equities in February when the market made its last correction then took some good profits last week when the sentiment indicator flashed "take profits." If the market pulls back enough to hit some of my newsletter "auto buy" levels then we will buy the shares back. My "Auto Buy Levels" are prices for limit orders my subscribers can set ahead of time with our broker so they execute during the day if price targets are reached.

Garzarelli's 2010 Targets - S&P500 to reach 1315

For all of 2010, Garzarelli expects a 28% increase in S&P 500 operating earnings, spurred by easy comparisons, company cost-cutting, recovering economies around the globe, low interest rates and low unit labor costs.

Her GDP outlook calls for 4% growth this year, which she thinks should enable the S&P 500 to realize its fair value of 1315 before year end. Such a showing would represent about an 8% gain from the index's current level of around 1217.

On Interest Rates

While fears of rising interest rates are mounting on Wall Street, Garzarelli pooh-poohs such concerns. She reckons that financial nervousness and lofty unemployment will likely keep the Federal Funds rate--now in a range of zero to 0.25%--stable at least till the summer.

Summer is only two months away.

Since 12/31/98 "Kirk's Newsletter Explore Portfolio" is UP 159% (a double plus another 59%!!) vs. the S&P500 UP a tiny 8.6% vs. NASDAQ UP a tiny 3.5% (All through 12/31/09)

In 2009, "Kirk's Newsletter Explore Portfolio" gained 33.5% vs. the DJIA up 18.8%As of 4/25/10, the explore portfolio was up 11.1% YTD

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S&P500 Chart

click chart courtesy of stockcharts.com for full size image

More S&P500 Charts

Moneytalk with Bob Brinker Guests

Bob Brinker's Moneytalk guests this weekend were:

Saturday:
Vickie Ward, author of the book The Devil's Casino: Friendship, Betrayal, and the High Stakes Games Played Inside Lehman Brothers

Sunday:
Marc Chandler, author of the book Making Sense of the Dollar: Exposing Dangerous Myths about Trade and Foreign Exchange (Bloomberg)

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Both eligible for FREE Super Saver Shipping

Secular Bear Market Definition Bob Brinker

Bob Brinker loves to use catch phrases to help him sell the idea he can time the stock market. Don't let them fool you.

Honeybee reported yesterday in her April 10, 2010, Bob Brinker's Moneytalk: Summary that Bob Brinker is talking about "cyclical bull markets" again on his radio show. She repored:

* Bob Brinker said: "The Dow Jones Industrial Average closing out the week at 10, 997. That is a new cyclical bull market recovery high for the Dow. The S&P 500 Index also closing the week at a new cyclical bull market recovery closing high of 1194....The total rate of return, including cash dividends, for the S&P 500 Index year-to-date, now stand at 7 1/2%."

and

Item of interest: BOB BRINKER'S SECULAR BEAR MEGATREND IS ON AGAIN.

In June, 2007, Bob Brinker stated that the secular bear megatrend that he said began in Year-2000 had ended the PRIOR year -- in June, 2006!

June, 2007 Marketimer, Brinker said: "In our view, the valuation based secular bear market that was established following the March, 2000 closing high for the S&P 500 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."

Brinker never mentioned the secular bear megatrend again until this month (And he never told Moneytalk listeners he said it ended):

April 5, 2010, Marketimer, Bob Brinker said: "The current secular bear megatrend began during the first quarter of Year 2000, and is now entering its eleventh year."

No doubt, Brinker had to declare the secular bear megatrend back on because even though his timing model missed the worst bear market since the Great Depression and he rode it down fully invested, he is now calling the current market a "cyclical bull market."

Honeybee is right. Bob Brinker originally came up with the "secular bear market" long after the markets peaked in March 2000. He stuck with it until 2007 when the stock markets were making new all time highs then he said it ended the year before! What was absurd is by definition secular bears end when new highs are made.

Now Brinker says the secular bear market has been going all along and doesn't give any reason as to why he was so fooled in 2007 to have reported it was over while recommending a gift horse buying opportunity with the S&P500 in the mid 1400s!!!

Don't be fooled. If Bob Brinker didn't have a clue the markets would collapse just before the biggest bear market since the Great Depression, then what gives you confidence he has a clue what they will do now?

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Old updates:

• 2010: Feb 9
• 2009: Jan 13 Dec 3 Nov 24