New York Magazine’s cover: “Things are better than they seem. Honest.”
Some of you are now thinking: “Uh-oh, another happy mag cover. That spells trouble for the stock market.”
Let’s review if this meets our requirements for a major warning, a contrary indicator sufficient to halt the rising equity markets. As it turns out, the short answer is no.
Here are the details:
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If you recall 2 weeks ago, we discussed what the premise of the magazine cover is:
1. Mainstream — not business — publication
2. Well understood concept that is reaching a climax
3. Asset price gains
Rule #1 was easily met. New York magazine is a non-biz, mainstream publication.
Second, while the stock market has rallied hard from March 2009 — up 82% or so — this cover is not cheerleading that rally. So we haven’t really met the subject of rule #3.
But the main reason this fails as a magazine cover contrary indicator, is our rule number 2. We haven’t had a run of optimistic news. QE2 would not be necessary if everything was hunky-dory. Things have been mediocre at best.
The psychological angle of the cover indicator is simply this: Some well understood concept is climaxing just as it makes the front of a mainstream media outlet. That is not met here.
Indeed, the entire concept behind this issue of NYMag is “Hey Buddy! It aint THAT bad! We know things are tough — try to look at the bright side of life.
Compare that with “Why we are gaga over Real Estate.” Hence, we do not have a contrary magazine cover indicator at work here.
You may return to your prior tasks . . .
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• Look on the Bright Side
• The Happiness List
• Mr. Sunshine: Jimmy Fallon
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Previously:
Uh-Oh: Barron’s Cover “Bye Bye Bear” (October 31st, 2010)
Tale Of Home Prices Told Through Covers Of TIME (September 14th, 2010)
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