Go to the Amazon.com link below for TIMING THE MARKET by Deborah Weir (Wiley, 2005).
Email: DebWeir@WealthStrategies.bz
Take her class at the NY Institute of Finance: nyif.com/courses/fimk_1014.html.
Friday, March 02, 2007
The outlook for equities is not great. The high-yield bond index/10-yr. note spread is widening dramatically.
4 comments:
Anonymous
said...
Can you post the graphs like the one this blog on January 18? How quickly would you respond to the widening bond quality spread if it continues to widen? Based on your book, if this continues then an extended market pullback should materialize.
I'm concerned; the market is vulnerable. The complacency of two weeks ago may turn to panic next week. I’m beginning to remember the volatility of 1998-2002 now. I may have to go back to writing in the money covered calls (If the volatility comes up enough).
I'm thinking anticipation of an economic slowdown, and interest rate cuts is what is behind the 10-yr yield decreasing. If we continue to move towards a slowdown, then the junk bond yields will increase as the chance of junk bond defaults will soar.
But here we are at an important time (S&P500 at 1388), and there are some positives (VIX, P/C ratio, all 30 Dow stocks down, inflation low, interest rates low, etc.) and also some negatives (yield spread widening, foreign markets in turmoil, Yen carry trade unwinding, possible recession ahead, etc).
One of the reasons I read your book was that you maintain this blog, and it was my hope that by following your work, and real world thoughts, as posted on your blog, that I would better understand your methodology. Yet what I am finding is that your work too is ambiguous ,...very indecisive.
What I would like to know is your current overall opinion of this market. Is this a time to be buying or to be selling? Do you feel we are on the verge of a meltdown, or prolonged decline, or do you feel this is a sharp correction in an ongoing bull market, and a time to buy (as in June 2006)?
There are always positives and negatives, but the bottomline is some kind of an actionable decision. Any thoughts on the future direction, what we can expect from here, would be very much appreciated.
4 comments:
Can you post the graphs like the one this blog on January 18? How quickly would you respond to the widening bond quality spread if it continues to widen? Based on your book, if this continues then an extended market pullback should materialize.
I'm concerned; the market is vulnerable. The complacency of two weeks ago may turn to panic next week. I’m beginning to remember the volatility of 1998-2002 now. I may have to go back to writing in the money covered calls (If the volatility comes up enough).
Surprisingly the spread increase is mostly due to the 10-yr yields decreasing not the junk bond yield increasing.
Whats the significance of that?
I'm thinking anticipation of an economic slowdown, and interest rate cuts is what is behind the 10-yr yield decreasing. If we continue to move towards a slowdown, then the junk bond yields will increase as the chance of junk bond defaults will soar.
Deborah,
I enjoyed reading your book.
But here we are at an important time (S&P500 at 1388), and there are some positives (VIX, P/C ratio, all 30 Dow stocks down, inflation low, interest rates low, etc.) and also some negatives (yield spread widening, foreign markets in turmoil, Yen carry trade unwinding, possible recession ahead, etc).
One of the reasons I read your book was that you maintain this blog, and it was my hope that by following your work, and real world thoughts, as posted on your blog, that I would better understand your methodology. Yet what I am finding is that your work too is ambiguous ,...very indecisive.
What I would like to know is your current overall opinion of this market. Is this a time to be buying or to be selling? Do you feel we are on the verge of a meltdown, or prolonged decline, or do you feel this is a sharp correction in an ongoing bull market, and a time to buy (as in June 2006)?
There are always positives and negatives, but the bottomline is some kind of an actionable decision. Any thoughts on the future direction, what we can expect from here, would be very much appreciated.
Regards, Jim P.
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