The Bull’s Sheet

Okay, let’s review the Bull’s Sheet (say that 3 times

At 11,000, we were told to “Just Buy Something.”

Then Dupont and Alcoa missed, as they were unable to pass
along price increases – but we were told it was specific to just them

Then Yahoo, Intel, Apple and eBay made bad noises. But don’t
y’all worry, its due to reg FD –- management cannot give excessively bullish
guidance (they way they used to lie to us). Not to worry, the “Pain of Lowering
Bar in Tech Will Pay Off.”

Then GE and Citibank missed.


How many companies have to miss earnings, revenues or lower
guidance before any acknowledges this for what it is?

Incidentally, I expect that the market has one last rally
left in it. Some apologist will rationalize the end of this cyclical Bull
market by declaring the Fed is now done, or perhaps a truce in the Middle East
between Iran and Israel will be
he excuse. Maybe Oil comes in.

Regardless, you know my views – the cycle is over, the
economy is slowing, the consumer is all but spent, Real Estate is last years

It’s still too early to cue the fat lady, but I can see her
backstage, sipping on a nice cup of tea with lemon and honey.

~ ~ ~

UPDATE: January 21, 2006 6:00am

How funny is this sketch from Bend the Rail ?


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What's been said:

Discussions found on the web:
  1. TonytheTiger commented on Jan 20

    “Incidentally, I expect that the market has one last rally left in it.”

    I totally agree, and I think that damm acorn is gonna hit that fat lady on the head within months to come.

  2. me commented on Jan 20

    At least 3 of us are sane.

  3. DG commented on Jan 20

    I couldnt agree more Barry. Im interested to see the flood of people bubble vision trots out to proclaim this the best buying opportunity we’ll see in years.

  4. Chad K commented on Jan 20

    FWIW, I love the people who follow the herd and do “just buy something”…. Had several stocks go up 9%+ in the first few weeks of the year… dumped them at the peak, since I am about 80% sure this year will be a down year overall… will pick them up when they’re back to more reasonable numbers (P/E, PEG, etc)…

    There is much value in playing a thinking mans game against cavemen.

  5. scorpio commented on Jan 20

    B: i dont think anyone thot 4Q earnings would come in so shitty, not to mention guidance. only thing in question now about your ’06 view might be the bump up before the crash down

  6. jp commented on Jan 20

    Barry, I think you have to add the following to your list of concerns:

    I am toubled by the combination of the following recent events:

    OBL tape, Amadinejad visiting Damascus, the upcoming IAEA / UN talks, Sharon’s incapacitation and Chirac’s vow to nuke any state that attacks France with WMDs. Throw this together with the large disposible cell phone purchases in the past couple months in the US and it seems to me that Iran/Syria and Qaeda are whipping up some terror coordination in the near future to prevent action against the Iran nuke regime.

    UPDATE: Astute Blogger agrees, and points out that:

    Iran is moving its foreign currency reserves out of European banks as a pre-emptive measure against any possible U.N. sanctions over its nuclear program, the Central Bank Governor said Friday.

    This is not good. Something is brewing.

    UPDATE: US Market down 200 points on Iran & Quaeda fears, + earning issues. MORE TO COME HERE, I think. see Barry Ritholtz at

  7. j commented on Jan 20

    Well, I hope you are happy, i just snorted a cup of lemon tea with honey out my nose upon reading your last line.

    –The Fat Lady

  8. David Silb commented on Jan 20

    Yes, I just wiped my monitor of the mouthful of bottled water I was just abou to swallow.

    Big question: Why is it that we seem to know more about Iran, Iraq and Alqaeda then say our elected officials?

    Hmmm…. Maybe cause it matters to us. And maybe cause President Chenney (come on if you don’t know this by now I certainly can’t help you.) Is more interested in re-strengthing the executive office than to really worry about terrorism or economic issues, you know the hum drummy things.

    Barry it is time you sit back a take cleansing breath.

    Good luck on TV.

  9. Jordan commented on Jan 20

    The bulls will blame the drop on Bin Laden’s video. The technical evidence of a top has been strong for the past year. We see key divergences in the A/d Line, 52 week highs, MACD, RSI. The market was strongest in 2003 and its strength has waned since then.

  10. Lord commented on Jan 20

    Just buy something.
    Just buy something, please.
    Just buy something, anything.
    Just buy something now.

  11. Paul commented on Jan 20

    Why the sky isn’t falling: Wall Street’s Chicken Littles have it all wrong — and there’s money to be made betting against them
    By Michael Sivy, MONEY Magazine editor-at-large
    January 19, 2006: 9:52 AM EST

    Yesterday’s article, which had a link from the CNN markets page earlier today. This afternoon it’s been replaced with a Jan 3 Sivy piece on bargain hunting.

    So if Monday is an up day, the chicken little headline gets put back, and if it is another down day, the bargain hunting piece stays up? Very helpful.

  12. muckdog commented on Jan 20

    Options expiration. First week of earnings. You couldn’t ask an amusement park designer for more volatility. Folks will read the papers tomorrow, and see some negative headlines about today.

    So will greed or fear hit us at the open on monday?

    Will those who truly wanted a pullback so that they could get long take the chance? Or, are you chicken, McFly?

  13. Luke Neely commented on Jan 20

    Barry – Is there anyone in particular you recommend reading from the bull camp, as a counterpoint to your own views?

  14. Barry Ritholtz commented on Jan 20

    Last minute call from Kudlow’s office –I tired to beg off (not only in a sweater, but unshaven to boot) — but they insisted.

    Normally, I’m in a suit & tie for these shows — but they begged me to show up and make the Bear case . . .

  15. Globetrader commented on Jan 21

    Why do you think, this year will be different from the last 2 years?
    Here’s a weekly YM:
    As you can see, the selloff starts late December, January or early February, has a leg up somewhere in April, early May, sells off to recover again in August and starts the christmas rally in october to make a new HOY.

    2003 we had a bullish run-up, since then we are trading in a 1250 points wide range in the Dow with an upward bias. Of course you can argue, this was the 3rd test to decisevly break 11000 and as we failed again, we will see a retest of the 2003 lows. I don’t think so, but a restest of the 2004 lows in the 10000 to 9700 area is sure possible this year.

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