Sucker’s Rally?

I had fun doing this interview with Henry Blodget of Yahoo Tech Ticker and SAI:

Note: I don’t say we have to go below 10,000, but only that its possible. And I pretty much say that these forecasts are only guesses.

The last time I was on was July 15th, announcing that we were covering shorts, and calling for a bear market bounce . . .

Sucker’s Rally Alert: Dow Going Below 10,000
Henry Blodget
Yahoo Tech Ticker, Aug 12, 2008 03:31pm EDT’s-Rally-Alert-Dow-Going-Below-10000

Wild Times on Wall Street: What Now for Investors?   
Aaron Task
Yahoo Tech Ticker, Jul 15, 2008 07:00am EDT

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  1. Vermont Trader commented on Aug 13

    Well said. In the summer of 2002 the market was brutal, selling off everyday because of forced selling by mutual funds due to redemption.

    That is the key element I am watching now..

    How is the market acting into the close after redemption windows close?

    We have seen late day sell off for 2 days now. i think the action into the close today might be the most important clue of the year.

  2. chuck commented on Aug 13

    Good stuff! Barry really appreciate your work. You have definitely been right on the market for a long time. It will be interesting to see how the rest of the year plays out and I agree that the lady isn’t singing just yet…

  3. manhattanguy commented on Aug 13

    Who was that idiot who called the bottom? Jim Cramer?

    Barry, you were also wrong with your last week predictions of a short term bounce to 12k. Not seeing that happening.

  4. Bruce commented on Aug 13

    A little more in-depth about a sucker’s rally…I have been watching as the techs have been doing relatively better as of late than the more mainstream stocks…this is conventional wisdom, that techs should do better in a downturn as tech upgrades will make you more efficient, etc. (all the usual blather)..

    Well amat missed their numbers and I know you all have seen the headlines…and the CEO gave a bright outlook which, I suppose, is why the stock has been a little higher much of the morning..

    However, if you look at the book to bill ratio of semiconductor manufacturing equipment, this has been negative now for months and months…last month is was .85, and at no time this year have orders been as good as shipped product..( A book to bill of 1 would mean that for every dollor of goods shipped one new dollar of orders came in)

    If orders are not keeping up with shipments, where is the underlying good news for chip equipment manufacturers, and frankly, much of the tech sector?

    Bruce in Tennessee

  5. Paul Boughton commented on Aug 13

    This rally in the SPX should end Aug 21,the bottom in the SPX should be 762 may 2010

  6. Eric commented on Aug 13

    manhattanguy, most of the criticism surrounding Cramer’s bottom calls, rant and other self-serving shticks is **NOT** based on the fact that sometimes he is wrong. It is based on the fact that he makes sweeping bullish and bearish predictions and then claims victory no matter what happens. If the market were hitting new highs right now, you think we’d be hearing about his August rant? Nope. We’d be hearing about his numerous bottom calls starting in March of 2007 and continuing up to last week.

  7. Eric commented on Aug 13

    Question for BR…Not that long ago, Blodget was a pariah. And then he did a piece in Slate slamming Cramer. Cramer called Blodget a disgrace, embarrassment, etc. And it wasn’t long afterwards, that Blodget joined Task for Tech Ticker.

    Query: As someone who frequently comments upon and rates the various blogs, shows, etc., how would you compare the quality of what Blodget and Task have put together in a fairly short time vs. what Cramer and his support crew are putting out in terms of interviews, commentary, insight, etc.

    I’m not asking for you to slam anybody. I’d just like to hear your opinion of their respective quality as you would any other shows. Anyone else curious about what BR thinks about this?

    BR: I find that Yahoo Tech Ticker video is very good — The downside is their emailers and commenters are simply nuts — clueless kids and assorted whackos.

    As to Cramer — I simply find the show unwatchable. Haven’t seen it in 2 years

  8. Jeff commented on Aug 13

    Bingo Eric. I had been a fan of Cramer’s for about the first year of casually watching, but the more I watched (e.g. I basically have CNBC on in the background all day while I work and I read his columns/listen to his videos, the more I realized that he’s all over the place and tries to call “victory” no matter what the market does. It amazes me that he can get away with this, but then again, most people probably don’t pay as close attention to what he says every day as I do so they may catch an accurate call here and there and think the guy knows all. Will it someday catch up with him? I think if the market re-tests July 15th’s lows in a BIG way, we might see that happen a little bit but let’s just watch him backtrack his way out of that one. Should be fun but nauseating at the same time.

  9. Scott in Chicago commented on Aug 13

    Henry Blodget?! He of the “new paradigm.”
    Barry not to pick nit, but Blodget belongs in jail and you really shouldn’t (and yes, this is an opinion) give him any additional credibility by showing up to be interviewed by that dishonest little prick, even if it does add in some way to awareness of you. Blodget is a frikkin’ whore, and sometimes, however unfairly, guilt by association manifests itself.

    BR: I’m less harsh on Blodget — I thought he was made a scapegoat for the entire industry. If you go back and reread the emails he was crucified for, he was complaining that the Merrill research was too bullish, and that they were going to lose clients money.

    I compare Blogdet (whose kinda academic like) with Grubman, who was merely a greedy whore fucking everyone for money.

    I don’t want to make excuses for Henry, but he was a lesser “felon” to use someone else’s word than the rest of the whores.

  10. Scott in Chicago commented on Aug 13

    Oh, and what’s next? Being interviewed by Angie Mozillo about your take on the tragedy of foreclosures? I foresee an entire industry of bubble enabling whores and crooks having biz media venues to publicly appear human while adding more juice to their own pockets. Sheesh! Sorry, couldn’t help it ;)

  11. Kit in CO commented on Aug 13

    Gee folks, everyone knows that all the TV talking heads in ANY market program are basically there to keep a shiny, happy face on whatever excrement has hit the fan economically/financially. They’re all in the same catagory as far as I am concerned, some are just more manic about it. Just because some guy has a show doesn’t mean they know anything, so buyer beware (or listener beware, as the case may be).

    Also, Barry is nice enough to write here and let us read it for nothing more than the energy it takes to click the link, so a little respect, eh?

  12. Matt M. commented on Aug 13

    Wow! Lot of folks have some anger issues towards media folk. Too funny…..calm down… Cramer is selling subs and ratings….Blodget is just trying to pay his rent…Barry is selling research (Fusion)… everyone you read or see is selling something. Just manage your capital…focus on your system…keep intense discipline and you’ll be fine. Relax!

  13. Jeff commented on Aug 13

    @ Matt M: So what you’re saying is it’s impossible to “sell” something and not be honest or have any semblance integrity? Am I being quaintly naive in asking for such things?

    I’m skeptical of everything that I read or hear (even this blog), but I do think that a return to some semblance of honesty and integrity (regardless of what people are “selling”) is a requirement to keep confidence and long term viability in our so-called “capitalist free market” (and I use that term loosely for obvious reasons) system.

  14. Scott in Chicago commented on Aug 13

    Matt…I guess my point re: Blodget is that we should be paying his rent and he should be making out license plates. And Mozillo should be his roomie and love slave. Otherwise I’m just having some fun and tweaking Barry a little. As for managing, focusing, relaxing,etc. Now why didn’t I think of that? If I was any more relaxed today I’d be comatose ;) Happy trading

  15. Matt M. commented on Aug 13

    Plenty of honest people selling things…. my point was that there seems to be all sorts of anger towards a couple of guys who are in the media biz….not the trading biz. Eagle traders don’t talk…..almost every person you see on CNBC and (& wherever Blodget is) is there for a different reason than to give you good trading advice. That’s all was saying.

  16. Noob commented on Aug 13

    Vermont Trader,

    Could you explain a little more about mutual fund redemptions and their mid-term affects on the market?


  17. Tony commented on Aug 13

    Uptrends are uptrends and the run since mid-July has still not penetrated support. The fundies may be bad, but how much was priced in?

  18. CNBC Sucks commented on Aug 13

    The more Cramer continues to make these atrociously incorrect market calls, the more people will associate / confuse him with the hipster doofus from Seinfeld.

    Just get ready to have a seasonal suckers’ rally for the next few years (20 years if McCain gets elected). We had the Spring ’08 Sucker’s Rally, now it’s the Summer ’08 Sucker’s Rally. Eventually, the problem will not be ugly returns but boredom and ultimately indifference.

  19. sean commented on Aug 13

    Yeah, but you and your cronies also called for a bounce around 1280, a week and a half earlier:]

  20. Scott in Chicago commented on Aug 13

    Barry said, “…Kinda academic like..” to which I reply with a bit of a happy snot laugh and a “well played, dude..” and while I see your point re: Blodget, I just cannot stomach the guy. Back when Lou (effing) Dobbs did biz reporting young Henry spouted that “new paradigm” b.s. too many times. Though I have zero doubt that many and much bigger fish than he did worse and walked away unscathed; and are doing so right now, in fact.

  21. leftback commented on Aug 14

    Sean – calling bounces is an art not a science. You can always stay short if you don’t enjoy the ride but some counter-trend rallies do seem telegraphed, especially when technicals coincide with interference, rule-changing, PPT – call it what you will.

    Barry – Cramer is starting to sound out of control – he is making shorting stocks sound like civil disobedience at best, criminal activity at worst. This crap is anathema to free markets.

    Where was Cramer during the repeated cycles of `Pump and Dump’ as the banks raised capital that they “didn’t need”? There are real crooks here but they are not the shorts.

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