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| Subject: October for the bottoms of 10 bear markets since World War II. | |
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Date Posted: 09:40:35 10/10/02 Thu http://cbs.marketwatch.com/news/story.asp?guid={C06A8992-549E-4EA6-B0F8-BB2562F7FEEE}& ----------------------------------------------------------- October lives up to bearish imageCommentary: The final spiral has begun By David Callaway, CBS.MarketWatch.com Last Update: 12:01 AM ET Oct. 10, 2002 ----------------------------------------------------------- SAN FRANCISCO (CBS.MW) - One good thing about all this gloom in the stock market is that no one seems to yelp when Abby Joseph Cohen changes her market targets anymore. ----------------------------------------------------------- CBS MARKETWATCH COMMENTARY ----------------------------------------------------------- THOM CALANDRA (WEEKDAYS) Noted researcher forecasts series of severe losses TOMI KILGORE (MONDAYS) Citigroup's stock still has a lot to prove BAMBI FRANCISCO (TUESDAYS) On goes the witch hunt MIKE TARSALA (WEDNESDAYS) U.S. financial markets vulnerable to cyberattack DAVID CALLAWAY (THURSDAYS) October lives up to bearish image JON FRIEDMAN (FRIDAYS) Will Ted Turner oust Steve Case? ----------------------------------------------------------- Free! Sign up here to receive our Midday Market Report e-newsletter! ----------------------------------------------------------- TRACK THESE TOPICS My Portfolio Alerts Company: The Goldman Sachs Group, Inc. Add Create Column: David Callaway Create Index: Dow Jones Industrial Average Add Create Index: S&P 500 Index Add Create Index: Nasdaq Composite Index Add Create ----------------------------------------------------------- While market predictions from Goldman Sachs's (GS: news, chart, profile) chief investment strategist used to unleash breathless reactions from the media and investors during the boom years, news that she had cut her 12-month targets on the Dow ($INDU: news, chart, profile) and the S&P 500 ($SPX: news, chart, profile) on Wednesday was greeted with a big yawn. ----------------------------------------------------------- That's because investors have grown weary of stock market predictions, especially long-term ones that don't come with any caveats about how each particular seer's track record is. So when I read that Cohen was cutting her 12-month forecast on the Dow to 10,800 from 11,300 and on the S&P 500 to 1,150 from 1,300, I went back into our archives to see what she had forecasted 12 months ago. ----------------------------------------------------------- Sure enough, there they were. A year ago this week, Cohen introduced her year-end 2002 targets. The Dow would finish this year between 11,300 and 12,400, while the S&P 500 would finish between 1,300 and 1,425. ----------------------------------------------------------- For the record, the Dow closed at 7,286.27 Wednesday, its lowest level since October 1997. The S&P closed at 776.76. It's going to take a helluva rally in the next three months to hit Cohen's targets from last year. But hey, much easier to set new targets 12 months from now. That's the way Wall Street has always played it, and even with massive corruption being exposed daily, it's scary to see here that the game still goes on. ----------------------------------------------------------- Oh sure, everybody likes to be a Monday morning quarterback. And let me save you the time. A quick review of my first column in January this year found me arguing against the prognosticators who said we would see mild gains in stocks in 2002. My thesis was that we would either see a horrible sell-off, fueled by bankruptcies, terror concerns, and economic inaction in Washington, or decent gains of 15 percent in the Dow and Nasdaq ($COMPQ: news, chart, profile) and 10 percent in the S&P 500, as corporate earnings recovered. Guess which scenario I chose in the end? See the columm. ----------------------------------------------------------- So it's no wonder investors, myself included, have become disillusioned with long-term forecasts. At the moment, the market is focused on a very short-term forecast - for war - and how it might affect the global economy. If we could look out six to nine months from now without concern for war, the potential for stocks might seem a lot clearer. ----------------------------------------------------------- But we can't. So maybe looking back will help a little. ----------------------------------------------------------- According to the Almanac Investor, a newsletter that is part of the Stock Trader's Almanac group, led by Jeffrey Hirsch, the month of October is a bear-buster, responsible for the bottoms of 10 bear markets since World War II. ----------------------------------------------------------- Further, Hirsch notes that the Dow historically has gained 50 percent from its low during a midterm election year to it high the following year. That implies that if the Dow bottomed at its current level, it could get as high as 10,929 at some point next year, a number that is eerily close to Cohen's prediction. ----------------------------------------------------------- Of course, Hirsch admits he doesn't know where the bottom is any more than anyone else, though he thinks we are in the process of finding it right now. ----------------------------------------------------------- "It really looks like it's happening right here," Hirsch said Wednesday, as the Dow languished at a new five-year low of 7300, down 200 points in mid-day trading. "The towel is really getting thrown in right now from investors in mutual funds. Seven thousand looks like a number the Dow wants to get to." ----------------------------------------------------------- Indeed. As long as a war looms ahead, corporate corruption scandals remain unresolved, and the credit quality of some of largest financial institutions deteriorate, it's hard to find a reason to be bullish right now. This could easily be the darkest before the dawn, as the October historical patterns suggest. ----------------------------------------------------------- But for investors who have been burned by so many false rallies in the last three years, it sure seems the wrong time right now to be placing any new bets on a recovery. ----------------------------------------------------------- David Callaway is executive editor of CBS.MarketWatch.com. ----------------------------------------------------------- SAN FRANCISCO (CBS.MW) - One good thing about all this gloom in the stock market is that no one seems to yelp when Abby Joseph Cohen changes her market targets anymore. ----------------------------------------------------------- CBS MARKETWATCH COMMENTARY ----------------------------------------------------------- THOM CALANDRA (WEEKDAYS) Noted researcher forecasts series of severe losses TOMI KILGORE (MONDAYS) Citigroup's stock still has a lot to prove BAMBI FRANCISCO (TUESDAYS) On goes the witch hunt MIKE TARSALA (WEDNESDAYS) U.S. financial markets vulnerable to cyberattack DAVID CALLAWAY (THURSDAYS) October lives up to bearish image JON FRIEDMAN (FRIDAYS) Will Ted Turner oust Steve Case? ----------------------------------------------------------- TRACK THESE TOPICS My Portfolio Alerts Company: The Goldman Sachs Group, Inc. Add Create Column: David Callaway Create Index: Dow Jones Industrial Average Add Create Index: S&P 500 Index Add Create Index: Nasdaq Composite Index Add Create ----------------------------------------------------------- While market predictions from Goldman Sachs's (GS: news, chart, profile) chief investment strategist used to unleash breathless reactions from the media and investors during the boom years, news that she had cut her 12-month targets on the Dow ($INDU: news, chart, profile) and the S&P 500 ($SPX: news, chart, profile) on Wednesday was greeted with a big yawn. ----------------------------------------------------------- That's because investors have grown weary of stock market predictions, especially long-term ones that don't come with any caveats about how each particular seer's track record is. So when I read that Cohen was cutting her 12-month forecast on the Dow to 10,800 from 11,300 and on the S&P 500 to 1,150 from 1,300, I went back into our archives to see what she had forecasted 12 months ago. ----------------------------------------------------------- Sure enough, there they were. A year ago this week, Cohen introduced her year-end 2002 targets. The Dow would finish this year between 11,300 and 12,400, while the S&P 500 would finish between 1,300 and 1,425. ----------------------------------------------------------- For the record, the Dow closed at 7,286.27 Wednesday, its lowest level since October 1997. The S&P closed at 776.76. It's going to take a helluva rally in the next three months to hit Cohen's targets from last year. But hey, much easier to set new targets 12 months from now. That's the way Wall Street has always played it, and even with massive corruption being exposed daily, it's scary to see here that the game still goes on. ----------------------------------------------------------- Oh sure, everybody likes to be a Monday morning quarterback. And let me save you the time. A quick review of my first column in January this year found me arguing against the prognosticators who said we would see mild gains in stocks in 2002. My thesis was that we would either see a horrible sell-off, fueled by bankruptcies, terror concerns, and economic inaction in Washington, or decent gains of 15 percent in the Dow and Nasdaq ($COMPQ: news, chart, profile) and 10 percent in the S&P 500, as corporate earnings recovered. Guess which scenario I chose in the end? See the columm. ----------------------------------------------------------- So it's no wonder investors, myself included, have become disillusioned with long-term forecasts. At the moment, the market is focused on a very short-term forecast - for war - and how it might affect the global economy. If we could look out six to nine months from now without concern for war, the potential for stocks might seem a lot clearer. ----------------------------------------------------------- But we can't. So maybe looking back will help a little. ----------------------------------------------------------- According to the Almanac Investor, a newsletter that is part of the Stock Trader's Almanac group, led by Jeffrey Hirsch, the month of October is a bear-buster, responsible for the bottoms of 10 bear markets since World War II. ----------------------------------------------------------- Further, Hirsch notes that the Dow historically has gained 50 percent from its low during a midterm election year to it high the following year. That implies that if the Dow bottomed at its current level, it could get as high as 10,929 at some point next year, a number that is eerily close to Cohen's prediction. ----------------------------------------------------------- Of course, Hirsch admits he doesn't know where the bottom is any more than anyone else, though he thinks we are in the process of finding it right now. ----------------------------------------------------------- "It really looks like it's happening right here," Hirsch said Wednesday, as the Dow languished at a new five-year low of 7300, down 200 points in mid-day trading. "The towel is really getting thrown in right now from investors in mutual funds. Seven thousand looks like a number the Dow wants to get to." ----------------------------------------------------------- Indeed. As long as a war looms ahead, corporate corruption scandals remain unresolved, and the credit quality of some of largest financial institutions deteriorate, it's hard to find a reason to be bullish right now. This could easily be the darkest before the dawn, as the October historical patterns suggest. ----------------------------------------------------------- But for investors who have been burned by so many false rallies in the last three years, it sure seems the wrong time right now to be placing any new bets on a recovery. ----------------------------------------------------------- David Callaway is executive editor of CBS.MarketWatch.com. ----------------------------------------------------------- [ Next Thread | Previous Thread | Next Message | Previous Message ] |