Barrons with some good stuff this weekend from some folks who think the markets are cheap others no so much.

Steve Leuthold (bullish):

Does this particular downturn remind you of any other economic slumps in particular?

This recession is probably similar to the one that occurred around 1981. The average recession since World War II has been about 11 months. The longest was 16 months, and we've had two of those. And I think this one is going to last at least 16 months and probably longer than that, maybe 20 months.

This recession started in the fourth quarter of last year, so you are looking at a recession through the fourth quarter of 2009. But you have got to remember that the stock market is a lead economic indicator, and historically it has turned up about 60% of the way through a recession. Applying that timetable suggests that this market should be bottoming sometime this month, and that is very, very possible.

Jacqueline Doherty (various bearish analysts)

Talk about out of touch:

Analysts currently estimate that earnings for the companies in the S&P 500 will rise 29% in the fourth quarter, and keep climbing, by 15% in 2009, to a record $91.41 a share, according to Thomson Reuters. That seems wholly unrealistic, given the recent jump in unemployment, the credit crisis and last week's news that the economy contracted at a 0.3% annual pace in the third-quarter.

To get a better fix on what lies ahead, forget the analysts and pay attention to Wall Street strategists, who spend their time looking at the overall market, not individual companies.

The strategists tend to place greater importance on economic growth and employment patterns in formulating their earnings predictions.

Five prominent strategists we polled last week expect earnings for the S&P 500 to fall 15% this year and 3% next year, to roughly $70 a share.

If the strategists are right, stocks are pretty fairly valued right now. The S&P 500 was trading Friday at 960, or 13.7 times the strategists' $70 earnings estimate for 2009. For the past 30 years, stocks have traded at an average of 13.7 times expected earnings. So 13.7 times depressed earnings seems pretty reasonable.

Analysts' estimates have been falling, just not enough to reflect a weakening economy. For the quarter ended Sept. 30, earnings now are expected to drop 12% -- a complete reversal from last January, when analysts thought third-quarter results would rise 23%, according to Thomson Reuters. For the two-thirds of the companies in the S&P that have reported so far, earnings are down 11%. And many companies are lowering guidance.

In each of the three past recessions -- 1982, 1990 and 2001 -- earnings fell 22%, on average, from peak to trough, notes Steven Wieting, U.S. economist at Citigroup Global Markets. This time around, he's forecasting a deeper recession and a 31% drop in profits.

The S&P 500 currently trades at 21 times trailing earnings, higher than its 60-year average of 17.82, according to Birinyi Associates. If the top-down crew is correct and 2009 earnings come in around $70 -- and the average historic trailing multiple is applied -- the S&P 500 would be valued at 1247 by the end of next year. That's roughly 30% above today's level.
Let's say that S&P companies earn only $60 a share next year, which is Merrill Lynch's top-down estimate. Apply the same historic multiple of 17.82, and the index would be valued at 1069 -- about 11% above Friday's level.

The risk:

In past recessions, earnings multiples have fallen well below the average. In the 1975 recession, the market's trailing P/E sank to 7.28, and in the 1980 downturn it shrank to 6.84. A seven multiple applied to $60 of earnings would result in the S&P 500 trading for only 420 -- 50% below.

Standard and Poors earnings numbers:

2006 SPX eps- $87.72;

2007 SPX eps- $82.54;

2008 SPX eps- $72.54;

2009 SPX eps -$94.25;

The polling continues on a daily basis but the tightening mentioned continuously in the MSM doesn't appear to be happening- the numbers represent the trackers numbers for the last 3 iterations:

Rasmussen (+5) (+7) (+7)

Zogby (+5) (+7) (+7)

Hotline (+7) (+7) (+7)

Gallup (+10) (+8) (+7)

IBD TIPP (+5) (+4) (+4)

And besides the polling numbers - the early voting seems to be favoring the dems. Of course the numbers on INTRADE refuse to tighten.

Just in from Gallup:

Gallup's interviewing conducted Wednesday through Friday shows that 27% of registered voters who plan to vote have already voted. The trend in early voting has trended consistently upward on a day to day basis, moving from 7% of registered voters, who had already voted during the period of Oct. 17-19, to the current estimate of 27%. Another 8% of registered voters still indicate that they plan on voting before Election Day itself. The vote choices of these early voters -- all of whom are included in the likely voter pool since they are definite voters -- skew more toward Barack Obama than the sample average. Thus, more and more of these Obama-oriented voters' choices are being "locked in" to the likely voter pool through early voting, benefiting Obama. (To view the complete trend since March 7, 2008, click here.) -- Frank Newport

So 35% will have voted before Tuesday? Well lets see how this pans out?



Markets got a bit volatile into the last hour but dip buyers were rewarded all day. I guess today's market was designed for Tommy the Trader!!!- just don't overstay the welcome.

Strong sectors- gaming, shipping, homies and brokers while metals, utils, telecom, emerging markets and tech lagged.

NYSE- 1425 net winners;

NAZ- 1500 net winners;



VIX- down 3 and 5% - under 60;

Up volume 3X the down;

Looks like a buy the dip market for now - just don't overstay the welcome as the market can move very very quickly- Surprisingly AAPL GOOG closed lower while GS was flat- a bit unusual for a big up day.

Monday another day and for now its one day at a time.


The latest from Gallop- the Obama lead is expanding- and especially among the "likely" voters.
The IBD TIPP poll from those left wing nuts - "Obama's lead ticking up (+4.4)." And of course the huge undecided number at 8%.

Seems like most talking heads on TV concerned about ratings - not real news.


Markets continue to chop around and hopefully we DO NOT see much volatility into the afternoon. A quiet day would probably be a welcome event for all who watch the screens full time.

Strong sectors- gaming, brokers, trannies, homies and financials while metals, oil service, emerging markets and utils lag.

NYSE- 870 net winners;

NAZ- 950 net winners;



VIX- down 3 at 60 and making a slow move down the charts;

Up volume 1.5X the down;

Looking for a choppy afternoon and still long DDM and now long DUG- (short oils) and out of the UYG trade -

More nonevidence of the tightening of the race - from another right leaner;

KAPUT health insurers;

The "eagle" on Sarah;

Here is HOPE for the RED;

And is AZ in play?

Finally, the SMASH;


Lets see how the daily poll trackers are doing in light of the "supposed" tightening - today v yesterday:

Rasmussen- (+4 ) (+5)

Zogby- (+7) (+7)

Hotline - (+7) (+7)

Gallop (+8) (+7)

CBS NYtimes (+11) (NA)

GWU Bground (+4) (+3)

UGH - don't see it as most are the same with Rassy +1 for McCain and Battleground/Gallop +1 for Obama-

Check out Nate's take on the voting out in the Mountains where it is likely that over 50% of the public has already voted in New Mexico and Colorodo.

Oh and the trading - long DDM and UYG as the financials looking good - opted out of the DUG trade as the markets feel like they want to go higher for now.


Markets are getting bought with the financials leading the way and the NAZ/tech lagging along with oils.

NYSE- 250 net losers;

NAZ- 360 net losers;




VIX- flat at 64;

Up and down volume about equal;

Looking to get long UYG for quick trade and a DUG long may go well with it as oils are lagging and have outperformed of late.


Futures set to open lower and my thoughts are to wait and see if the dippers show up to buy or let it just go and try again on Monday.

John Harwood- a very good CNBC political reporter with his take - he sees nothing to indicate the race has tightend.

More spin on TV about how close the race is getting- hmmm- the lefties over at Rasmussen declare a winner;

Morning Schmoe continues to yap about a tightening race- my guess - just trying to keep viewers -with his fixation on PA - check those polls-

No one discussing this problem for McCain;

Vulnerable to job cuts;

BESPOKE- with the best performing sectors;



Its the hold on to your seat time for the markets as folks hope these prices hold- NO CLUE-

Polling update for 10-30 - those wondering if the race is tightening?

Gallop +7 (likely)

Hotline +6 (likely)

Rasmussen +5 (likely)

Zogby +7 (likely)

Fox +3 (likely)


And if you compare them to yesterday- the lead is moving in Obama's favor- despite what anyone may have heard-


Oh and INTRADE.COM 85/16- so the gamblers sticking with Obama;


The gap filled and congrats to all that took that nice short entry- and I suspect it may reappear before long as a lower close today may be in the cards.

Currently, DJIA+80, NAZ +15 and SPX +10.5.

Strong- emerging markets, ags, gaming, shipping and oil service while metals, banks, telecom and real estate lag.

NYSE- 1500 net green;

NAZ- 900 net green;



VIX- down a bit at 67.4;

Up volume 3X the down;

SPX gap filled at 930 and yesterday's highs at 970 still a distant memory- financials and banks lagging again as GS/GE BKX all trade ugly- may be preceding the rest of the markets selling off.
GS on the bonus pool;
The bulls and the GOP;
Trading the Volatility;
Finally- Cramer;


Markets opened higher but are well off their best levels and the highs of yesterday are probably some numbers to watch- DJIA 9350 and SPX 970 as big resistance.

Strong sectors- ags, emerging markets, gaming, shipping and oils while banks, bio and drugs lag.

NYSE- 2050 net winners;

NAZ- 1540 net winners;



DJIA- 26 GREEN with XOM JNJ GM MMM all red;

VIX- down 6% at 65.4;

Up volume about 8x the down;

RSI (2) levels a hair above 80 on the major indexes and the markets may be set for a short trade from here- waiting for another lift higher and probably going to use at/near yesterday's highs as the stop.

The latest on T Boone;

Frugal GOOG;

Where has all the money gone?

Finally, the BIG JOKE;



So what is a 375 point drop between traders? Not much but that is what happened in the final 10 minutes of the trading this afternoon. And anyone who bought or shorted had an opportunity to make some money.

Strong sectors included gaming, metals, oils, homies and shipping while financials, semis and utils lagged.

NYSE- 800 net winners;

NAZ- 520 net winners;



VIX- up 5% at/near 70;

Up volume slightly ahead of down;

Can't explain that action and I doubt anyone else can either but it was interesting - tomorrow - no clue - so will watch and wait and decide then.


Unlike most others, I won't pretend to have much of a clue about the markets after the 2:15 FED announcement- but a sharp sell off would not surprise me- not playing it unless I feel a lot more confident.

FWIW I may try a play on DUG.

BESPOKE - on the SPX earnings numbers;

The new 401K problem;

Today's gallop shows a bit better for Obama (51/44...49/46) then some of the others except for HOTLINE- which is still the 7 point gap;


The chop continues as the SPX hit its head at/near the previously mentioned 50% retrace at 942 - and the chop probably continues through the day.

Gaming, metals, oils and ags still leading while real estate, reits, financials and semis lag.

Market internals still flattish on the NYSE/NAZ while the OEX/NDX are a hair to the red side.

RSI (2) levels:

SPX 70


RUT 65


Back to the retracements, the XLE seems to have a target near the current quote with a high of 57 and a low of 38.

The QQQQ at 32 with a top of 36 and a low of 28.

The DJIA seems to be fighting at the 38.2 retrace (9,100) and well above the 9800/7900 50% retrace level at 8850.

Just wondering how this guy is holding up in light of the current real estate issues;

VIX + MORE on the FEAR;

What would Roubini do?

And accroding to one of the better pollsters- the race may be tightening just in time.


Markets are lower led down by the NAZ and the NDX- the recently crushed RUT seems to be acting best among the major indexes.

Strong sectors- gaming, oil service, metals and ags while emerging markets, semis, brokers and retail lags.

NSYE/NAZ flat internals;



VIX- a bit higher at 69.3;

Up and down volume about equal;
GOLD- $765;
Crude- $66.5;
EURO- 1.28;

Typically after big rally days like yesterday the markets tend to chop on the next day and with today being a fed day - well probably even more chop.

And FWIW- 50% retrace on the SPX 1044 high and 840 low gives us about 942 as the next big area of resistance- so sellers may show up near there.



A pretty crummy day not to have a feel for the direction - ugh- anyhow - the DJIA /SPX both climbed over 10% while the RUT/NAZ lagged.

Fascinating stuff from the sectors also as EEM +21%, Real Estate +18%, Energy +14% and metals +14%;

NYSE- 1875 net winners;

NAZ- 1160 net winners;



VIX- down 17% at/near 67;

Yesterday morning the SPX futures were trading at 825 and have now flown to 940 or about 14% in 36 hours- not to bad for the bulls-

No one saw all those forced liquidators today and most will be on the look out for them tomorrow- I hate to be the bottom caller but common sense says - the lows are probably in at SPX 840 as the markets got many opportunities to take it out.


The markets have done the following so far in the month of October- with a few day to go:

SPX - 1165 to 910 or down 22% for the month;

DJIA - 10850 to 8770 or down 19% for the month;

RUT - 680 to 470 or down 31% for the month;

NDX- 1585 to 1253 or down 21% for the month;

And its the end of October- typically the month of crashes - and the markets have obviously been crushed - Am I to be a buyer or a seller?


Markets continue to move around and are now near the highs of the day- with the DJIA +275, NAZ +33 and SPX +23.

Strong sectors include - emerging markets, telecom, energy, metals and ags while shipping, homies, biotech and brokers lag.

NYSE- 640 net winners;

NAZ- flat internals;




VIX- 75 and down 7%;

Really don't have a good feel for how this afternoon plays out as the money call has been to fade the market into the final 60 minutes - no idea if that works today -

BESPOKE- with some interesting stuff on recent market action;

PEW probably an outlier;

The latest from Minnesota 6th Congressional;


HELP- Can someone explain this to me - John McCain wants to buy up mortgages and issue lower balances to homeowners where the loan values exceed the fair value of the properties - with tax dollars from rich folks - since they pay the lions share of the taxes- and then says Obama is a socialist and re distributor who wants to "spread the wealth around"- how does this make any sense?


Markets open higher but are now well off their best levels as the consumer confidence number comes in at 38- the worst level ever.

The DJIA +200, NAZ +30 and SPX +18.

Strong sectors include emerging markets, ags, metals, energy, telecom and internets- laggards include homies, bioteck and brokers.

NYSE- 1100 net winners;

NAZ- 600 net winners;



VIX- 74 down 7%;

Up volume 3X the down;

Markets seem to be selling off a bit early (even for these markets) so a snap back before long is probably in the cards- note however the crummy action in the brokers as GS is down 6%-

Zogby continues to be an outlier in the polls as this morning he has OBAMA +4 v most other polls with Obama +7 or 8- and now the reason- he uses 38/36 for dems and repubs v 40/33 for Rasmussen- I guess we will find out who is right before too long.


Looking at the technicals of this market (who cares) note the SPX close yesterday under 850 which gives us a whopping 25% between the here and now and the SMA 50- not sure how many times that has happened - not sure how much it matters.

Anyhow, all the major markets futures indexes are trading way up this morning (4%+), on the heels of spiking foreign markets, so part of the oversold condition will be alleviated at the open.

Morning Links:

Robinson on the Bankrupt campaign.

Buchanan on "Obamaland".

Hitchens and the "War on Science".

Another 52/45 poll.

Finally, the endorsement from Hell.



Markets sell off in the final few moments and the DJIA closes down 200, NAZ -46 and the SPX 28.

Strongest sectors- telecom, semis and banks-

NYSE- 1800 net losers;

NAZ- 1600 net losers;



VIX- closes at 80;

Light volume yet again with down volume about 8x the up.

Anyhow, 400 point range on the DJIA and 45 on the SPX- still didn't break the SPX futures of 825 earlier this morning. It is very ugly and I refuse to call a bottom - just waiting and watching for now- did however seem like FORCED SELLING into the close.

So the prior lows, still not breached and maybe we get turnaround Tuesday tomorrow.

One of Cramer's old favorites - at an unimpressive price.

And Chuck Todd giving the election to Obama.


Markets continue to bounce around with the DJIA/SPX not far from the unchanged line -

Market internals - as usual far worse with the NSYE showing 1050 net losers and the NAZ with 850 net losers.

Telecom, financials, retail and real estate continue to lead;

GS getting hammered- while the XLF is green by about 2%.
The last thing I am saying is that the lows are in but we still haven't breached the lows of October 10 despite that it feels like we go lower every day.

VIX + MORE with a note on declining volatility;

Washington Post with an article on the sales increase in what may become a staple of life;


As usual, markets are off the lows in the early morning trade as the SPX futures traded down to the 825 level in the over night futures session- now about 50 points or 6% off those levels.

The DJIA -30, NAZ -10 and the SPX 3- all useless information since by the time you read this it will be far different.

Strong sectors- banks, real estate, retail, telecom and homies while metals, emerging markets, biotech and defense lag.

NYSE- 550 net losers;

NAZ- 500 net losers;



VIX- down a bit at 76;

Up volume a shade better than down;

Markets look/feel like they want to move higher and would a rally from these levels shock anyone as these were the prior lows on the SPX yet again.

FWIW- and I think its interesting information- 13% of stocks on the NAZ - now trade over $20- and more than half of the stocks on the DJIA stocks trade at $30 or less.

BESPOKE with some great stuff;

BARRY with some awesome charts on how bad it really is;

And of course the worst is yet to happen from Nouriel;


One brief post on the election and the polls- It is actually prettty simple in my opinion to determine the popular vote in 2008-

Rasmussen does a pretty pretty good job at determining party weighting and his numbers now show 40% dems and 33% GOP-

Assume approximately 90% will vote the party line and independents go for Obama by about 13/11 and Barr and Nader get 3% - that leaves Obama at/near 52% and McCain at 45%- and like all the rest of the pollsters I will use a 3 point margin of error - bottom line an easy victory in the popular vote for Obama and probably upwards of 375 EV's as most of the battleground states mirror the National polls give or take a bit.

And I will definitely flip back next Wednesday to see how this simple math worked.