BARRONS ROUNDTABLE - NEVER MIND

The Barrons roundtable gathered a few days ago and the current issue has this years predictions- Meryl Witmer with an interesting observation-

"It is an exciting time to be a stockpicker."

How did Meryl do last year with her picks at the roundtable:

MHK- -39.8%

WHR -45.3%

AEO -50.6%

III.UK -71.8%

NFDS.UK -41.2%

FKI.UK +47.1% (acquired during the year)

Not sure if she sold stuff before it tanked or what - and one big flaw with the roundtable is that one gives there picks and then we revisit way down the road. Anyhow, if you bought and held her picks for the year - not so good.

Abbey Joseph Cohen:

How do you look at valuation, Abby?

Cohen: We use seven different models to evaluate the S&P 500, based on earnings, book value, cash flow and such. We also do detailed return-on-equity analysis. Using a composite of those models, we think fair value for the S&P 500 is somewhat above where the market stands now -- and we have one of the lowest earnings forecasts on Wall Street. We estimate the S&P will earn about $55 this year.

With all these models, why was your '08 forecast so far off?

Cohen: We anticipated a sluggish economy at the time of last year's Roundtable, but changed our forecast to a recession a few weeks later. We adjusted our S&P targets downward. We didn't see the liquidity crisis that developed in the summer.

OK SURE - YOU NAILED IT;

How did Abby do with here 2008 picks:

Ibiden (Japan) -74.5%

WMI +6.7%

ROH +21.2%

INTC -35.3%

XLNX -12.5%

One of the most interesting look backs is Bond King Bill Gross's picks from last year- check it out:

Van Kampen Select Sector Muni Trust -37.3%

Pimco Corporate Income Fund 6.2%

Pimco Corporate Opportunity Fund -17.6%

GM BONDS due July 2033 -56%

Ford BONDS due Jan 2032 -50%

Usually one doesnt here much from Gross other than macro stuff- but picking auto company bonds last year - a disaster.

Who did well with their 2008 picks?

Fred Hickey- :

GLD +1.6%

AEM -11.4%

FXY +19.5%

SHORT (PUTS) RIMM +60.7%

SHORT (PUTS) AMZN +42.2%

And his picks for 2009:

MSFT CDNS GDX AEM DBA FXI;

Some other quotes from Fred:

"The government can't cure a disease that has been more than a decade in the making. The U.S has built up gigantic financial imbalances, and debt levels the world has never seen. Massive increases in public debt and spending can't replace the lost private-sector debt and cutbacks in consumer spending, allowing us to go on our merry way. The stock market is experiencing a snap-back rally, similar to what we saw in 1930, after the Crash of 1929."

"The stock market has rallied about 20%, and could go up 40% or 50%, as the little bull market did. Then reality is going to set in -- the reality that the economy is terrible, the unemployment rate is going to rise, the Fed's policies are imprecise. The dollar could get killed sometime this year, causing all kinds of problems. We have a more protectionist Congress. Deficit spending is unlikely to work. In sum, we have a date with more traditional bear-market levels. You'll see the single-digit P/Es [price/earnings multiples] that were typical in 1982, '74 even 1930 and '32. The market will go down significantly, and then make a bottom."

"On to gold. You have to protect yourself against potential hyperinflation. All the central banks are printing money now. The bull market in gold was rather orderly for the first eight years. We haven't seen the blow-off phase you get in all bull markets. That's coming. In dollar terms, gold was up 5% or so last year. In Indian rupees it was up nearly 30%. The price of almost all other commodities collapsed. I own bullion, the gold ETF [ SPDR Gold Shares (GLD)], some gold stocks and coins. I couldn't get them as the year progressed because demand was so great."

And if you are curious, Gabelli had an awful year also based on his roundtable picks:

TVL -90.5%

GAP 78.5%

CBY -33.4%

DISH -66.9%

ENSI +8.8%

GPC -12.7%

VIV.FRANCE -23.6%

RI.FRANCE -32.1%

This is just the tip of the ice burg from the interviews- bottom line IMVHO - they don't make them own up to their calls - as they just give their outlook for this year - and last year - well never mind.

MIDDAY THOUGHTS

Markets continue to trade lower but are hitting over sold levels on a short term basis- looking to scale in with the low RSI numbers and the SMA 50 rite near these levels- and looking for the trade to last about a week or so.

Sectors showing strength include bonds, ags and metals while oils, homies, semis and retail lags.

NYSE/NAZ internals also have been improving and a nice really before the day ends also wouldn't surprise me.

VIX- hanging near the flat line in front of the weekend despite the market drop;

Down volume about 3.5X the up;

Gold also looking interesting here for a short term move higher-

THE JOBS

Markets opens lower despite the pre market futures moving up on the "only 525K job losses" which beat the ADP number and the probable whisper level.

DJIA -105, NAZ 37 and SPX -14.

Strong sectors- shipping and bonds while homies, oils, gaming, retail, small caps and retail lag.

NYSE- 1500 net losers;

NAZ- 1235 net losers;

NDX- 5 GREEN;

OEX- 10 GREEN;

VIX- DOWN .7%- at 42.25;

RSI (2) levels:

SPX 15

DJIA 9

RUT 20

NAZ 23

NDX 23

Markets are over sold on a short term basis but the VIX going lower on this mornings prices is a bit disconcerting.

I suspect a short term bounce coming for day traders as it was straight down after the open- just don't expect much- Probably next weeks business.

Madoff the movie;

Market Sci BLOG testing the TM trading rules;

High Yield Income ETF's;

MIDDAY MEANDERING

Markets are lower again after a morning move higher led by the RUT - and another afternoon rally led again by the small caps is probably in the cards.

Strong sectors- metals, shipping, bonds, energy, drugs and telecom- lagging are gaming, junk, real estate and semis.

NYSE- 220 net losers;

NAZ- flat internals;

NDX- 30 GREEN;

OEX- 25 GREEN;

VIX- higher by .5% at 43.6;

Down volume 1.5X the up;

EURO moving up to 1.37 along with gold which trades at $856 while crude is down $1.25 at $41.5;

Looking for another afternoon bounce as it feels like a choppy day where dips can be bought and rallies sold- focusing on UWM.

THE OPEN

Markets are lower but a short term bottom may be at hand near the SPX SMA 50 as GS has flipped to green along with DIG and the BKX index.

NYSE- 640 net losers;

NAZ- 300 net losers;

NDX- 20 GREEN;

OEX- 25 GREEN;

VIX- up by 2% near the 44+ area;

Down volume less than 2X the up;

Looking for a bounce as the RSI (2) has already sunk to the 15 level on the SPX- the RUT also hanging in better than the large caps - will look to buy UWM on the next dip -

THE CHARTS

Futures were crawling back to the unchanged line this AM before the WMT info hit - they lowered numbers for the quarter and discussed "dissapointing" sales- hmmmm. Futures now down about 10 on ES and 107 on the YM.

The charts, we are still above the SMA 50, but that could get taken out early this AM - also heading to the the over sold area on the RSI 2 - (that was quick). The VIX another 5% jump this morning and that will also be in buy signal area.

Check out:

The Newest Deficit;

The BIG Survey;

Happy Talk from years gone by;

THE NUMBERS

Markets gave me the move down I was looking for on the afternoon whoosh- but didn't close at the lows - buyers did come in during the last few moments.

The over bought situation is now gone as we are about 4% above the SMA 10 on the VIX and at RSI (2) levels near 20 on the major indexes.

In addition - we are sitting a hair above the SMA 50 which is near the 900 level which was also the low for the day.

Not sure the worst is over - so taking it slowly for now with the anticipation that we are in a trading range between 890 and 945.

A little blogger problem uploading the images - but trust me - those are the numbers.

MIDDAY LOOK

Markets seem stuck here as they don't go down or up much from these levels- every blip up is sold and vice versa.

Market internals remain very tilted to the red - but they don't seem to be getting worse.

Sector in the green- the drugs while gaming, shipping, semis and metals lag.

VIX- higher by 6.5%;

The market is in an uptrend but the recent rule of weak markets closing at/near the lows may be the one to play today.

RSI (2) already making some moves down as most major indexes trading at/near 30-

THE OPEN

Markets are lower as the trading rules kicked in - markets were way over bought and Challenger expects almost 700K jobs lost for Dec- DJIA -150, NAZ -35 and SPX -17.

Strongest sectors- ags, drugs, biotech and utils while gaming, semis, shipping and oils lag.

NYSE- 1800 net losers;

NAZ- 1200 net losers;

NDX- 7 GREEN;

OEX- 15 GREEN;

VIX- higher by 5% at 40.5;

Down volume 5X the up;

Trading Markets trading rules (10);

GLOOM DOOM BOOM;

Looking for 900 on the SPX as the initial down side target- the internals are very ugly and this can be one of those good old days where the markets close at/near the lows.

THE LINKS

Futures are trading lower this AM as are most European markets- some links to start this ugly weather day:

Dr. Brett on his target profits;

Hulbert's Bullish Bandwagon;

The Bill Gross shopping list;

The new BULL;

The Byron Wien surprises;

The Technical Take;

CGM FOCUS and MAGELLAN- not so good;

The Markets are Cheap?

Official 2009 SP 500 Price Targets!!!

Themes for 2009;

THE CLOSE

Markets closed off their best levels in the final hours as the DJIA lost about half its gain before the close.

I am not bullish now as I suspect a nice sell off is in the cards- not shorting either as my conviction isn't all that high.

Note also the FIB retrace on the SPX- the 76% number was hit at 945 and then the BAC comments were made- so back down we went.

So back at it tomorrow with the expectation for lower markets- in light of the FIB retrace and the over bought conditions.

SELL MORTIMER SELL

Rally getting a little extended here and selling more longs- QLD /SSO- not looking to short as this market looks plenty dangerous for those folks.

Strong sectors include semis, oils, brokers, reits and shipping while utils, drugs, biotech and telecom lags.

NYSE- 1700 net green;

NAZ- 1200 net green;

OEX- 60 GREEN;

NDX- 70 GREEN;

VIX- lower by 2.5% at 38.2;

Up volume almost 4X the down;

Ringing the register on more 2x ETF's as this move up looks unsustainable in the short term- RSI (2) indicator back to the 90 level on most major indexes- so dumping but not going short.

THE OPEN

Markets open higher but have already lost over half two thirds of the gains as the sellers finally decide to fade the gap.

Strong sectors- oils, shipping, internets, gaming and brokers while telecom, drugs and biotech lags.

NYSE- 1400 net green;

NAZ- 1150 net green;

NDX- 70 GREEN;

OEX- 70 GREEN;

VIX- flattish near 38.5;

Up volume more than 2X the down;

Turn around Tuesday looks to be looking up to the name as the markets trade straight down from the opening push higher- the DJIA has lost about 100 from the highs while the NAZ holds in a bit better. Over bought conditions prevail with the RSI (2) on the SPX still trading near 90 while the RUT is up at 95.

Looking for market internals to roll over before I get aggressive on the short side- but selling longs probably continues to be a good play.

THE CLOSE

The bulls aren't giving up easily as the markets closed lower but well off their worst levels.

Sector strength- gaming, oils, junk, shipping and retail;

NYSE- 1050 net green;

NAZ- 244 net green;

NDX- 40 GREEN;

OEX- 45 GREEN;

VIX- flat;

RSI (2) levels-

SPX 81

DJIA 68

NAZ- 87

RUT 90

A little of the over bought levels were worked off today but the RUT/NDX keeps on trucking- and markets feel like they want to go higher - despite the continued crummy performance from the financials- looks like energy and commodities are going to lead this leg and the banks will continue to lag.

THE DIPPERS

Markets are moving higher despite the over bought conditions- DJIA -20, NAZ +4 and SPX +3.

NYSE- 1200 net green;

NAZ- 300 net green;

OEX- 55 GREEN;

NDX- 55 GREEN;

Strong groups- energy, ags, junk, gaming, shipping homies and defense while telecom, metals, banks and drugs lag.

Tech strong as AAPL GOOG MSFT YHOO all green;

SGP up 2.5% and that may be the target of PFE mentioned somewhere earlier;

VIX- down 2% at 38.45;

DJIA - split internals led by GM C AXP BA HD DD - losers- VZ T JPM WMT JNJ INTC;

EURO- moving higher again as GOLD recaptures some of the morning loses- OIL and energy very strong;

Looking for a nice close as traders seem to want to own equities for now- tomorrow Turnaound Tuesday- so those sell signals may come back to haunt us yet.

THE OPEN

Markets open lower on the heels of over bought conditions as the DJIA is -90, NAZ 24 and SPX 10.

Strong sectors include oils, gaming, utils, ags and shipping while metals, telecom, internets and drugs lag.

NYSE- 500 net losers;

NAZ- 780 net losers;

NDX- 18 GREEN;

OEX- 30 GREEN;

VIX- slightly higher but still under 40;

Down volume about 1.5X the up;

Crude higher by 3% while gold is off almost $25 as the dollar has soared v the EURO;

Looks like the dippers are trying to buy as the market is recovering while I type. My take is to wait as my suspicion is lower - we are very over bought and there are probably lots of sellers still looking to book profits after the recent run up.

THE WEEKEND

Not a lot of exciting stuff in Barron's but a nice interview with Birinyi- whose market expectations are about in line with my own(Lots of volatility but not much headway in either direction).

Also, an interesting article on bonds (get out now!) by Andrew Barry.

What does Laszlo say:

You spend a lot of time looking at various market indicators. How have those indicators changed in terms of what you think is important?

There have been huge changes. For example, when I came into the business, we still looked at the odd-lot indicator, if only as an indication of what the individual investor was doing. No one has mentioned the odd-lot indicator in the last 10 years.

Likewise, once upon a time we looked at mutual-fund cash positions. No one looks at mutual-fund cash anymore because funds are so large that to take an 8% or 10% position in cash is not making a market bet. Instead, it is making a business bet, because funds are so big that if they are wrong, they can't invest that cash in a matter of days like they could, say, 25 years ago.

What are you paying attention to these days?

An indicator that we developed is the number of stocks that are down 50% from their highs. At the market bottom recently, 322 of the S&P 500 stocks were down 50% from a year ago; that's an extremely oversold condition. The previous record, which was set in July of 2002, was 130 stocks. To us, that's a very useful measure of whether the market is oversold or overbought.

You published a note last month titled "S&P 750: The Bottom." What led to that conclusion?

A few things caught our eye. One was that we started to have some very bad days in November but the market still recovered. On Dec. 5, the unemployment news was really terrible and yet the market recovered that day, with the S&P closing up 3.7%. To us, those are signs of a positive market where people are starting to look beyond the bad news.

We also like it that stocks such as ExxonMobil [ticker: XOM] and Chevron [CVX] are starting to do very well, even though oil prices have dropped. That suggests to me that people were trying to get into the market via the back door, because you could put a lot of money to work in an Exxon or Chevron.

What else caught your eye in calling a market bottom?

We did an analysis that came out of our cycle study, and it showed that the greatest amount of decline in a bear market is always at the very end of the bear market. As we saw it, if indeed the market did bottom in November, as we suggested, a total of 70% of the decline occurred in the last quartile of the bear market. We also noticed that financial stocks were starting to show some stability, as well as large-cap stocks.

Where do you see investment opportunities today?

One thing investors, especially even institutional investors, should think about is not so much strategy but tactics. This market is somewhat similar to the fourth quarter of a football game where you are behind by only four points. You are not going to complete a 60-yard pass. So you have got to go for six 10-yarders or whatever. What we focus on is taking small bites.

How about a few quick stock picks?

We have a little bit of a different perspective on General Electric [GE]. Given that it pays an 8% dividend, it has limited downside, though it is probably not going to make us a whole of money in the next three to six months. But if we don't make money on GE in the next 12 or 18 months, then we've got some real problems.

What else do you like about GE?

They have global reach and a number of different business units. And they've said the dividend is going to be solid, so it will be a huge credibility issue if that changes.

And we still like Amazon.com [AMZN]. It's a controversial name and the stock has had a difficult time, but we're encouraged by the success of its product known as the Kindle, an electronic book.

Another name we like is Hess [HES], an oil company. It's a solid company, and it has a very nice trading pattern between 42 or 43 and 50. We buy it low and try to sell it high.

Andrew Bary's article on the bubble in Treasuries-

THE BIGGEST INVESTMENT BUBBLE TODAY may involve one of the safest asset classes: U.S. Treasuries. Yields have plunged to some of the lowest levels since the 1940s as investors, fearful of a sustained global economic downturn and potential deflation, have rushed to purchase government-issued debt.

The chief risk to the Treasury market stems from the potentially inflationary impact of both the Federal Reserve's super-accommodative monetary policy, which has dropped short rates close to zero, and the enormous looming fiscal stimulus from the federal government. It also may take higher yields to attract investors -- particularly foreigners -- as the Treasury seeks to fund an estimated deficit of $1 trillion or more in the coming year.

ONE SIGN OF TROUBLE FOR TREASURIES is the resilient price of gold, which has risen $150 an ounce since late October, to $880 an ounce, despite weakness in most commodity prices. Investors rightly see gold as an appealing alternative to low-yielding Treasuries and virtually nonexistent yields on short-term debt as the government cranks up its printing presses. Gold was up $45 an ounce last year, while oil was down 50%. Another worrisome indicator: The dollar has weakened recently, losing 10% of its value against the euro in the past month.

If you want to sell Tresuries short - TBT and PST.

Long-term corporate bonds with investment-grade ratings of triple-B now yield an average of 8%, nearly 5.5 percentage points more than Treasuries of comparable maturity. They rarely have yielded more than four points above government debt. Preferred stock of financial companies such as Bank of America (BAC) and Morgan Stanley (MS) yields 9% or more, and many preferreds carry tax advantages because their dividends, like those on common shares, are subject to a 15% federal tax rather than rates on ordinary income.

"The only part of the bond market that you need to be bearish on is Treasuries," says Jim Paulsen, chief investment strategist at Wells Capital Management in Minneapolis. "The other sectors are attractively priced."

Barron's mentions junk and investment grade corporate bonds as a way to play since they are at very depressed prices- HYG FAGIX LSBRX and convertible bond funds from FIDO VANGUARD and Putnam.

MUCKDOG- following the FOX Business Block and their picks from 2008- about in line with the performance with most other stock gurus:

Tobin Smith: Emcore (EMKR $15.30 to $1.30)
Pat Dorsey: American Express (AXP $52.02 to $18.55)
Gary B Smith: Bank Of America (BAC $41.26 to $14.08)
Scott Bleier: Marteck Biosciences (MATK $29.58 to $30.31)
Patricia Powell: Potash of Saskatchewan (POT $143.96 $73.22)

Gary Kaltbaum: Oracle (ORCL $22.58 to $17.73)
Charles Payne: Washington Mutual (WM $13.61 to $0)
Jill Schlesinger: BLDRS Emerging Markets 50 ADR Index (ADRE $55.04 to $27.31)
Peter Schiff: streetTRACKS Gold Shares (GLD $82.46 to $86.52)

Wayne Rogers: BE Aerospace (BEAV $52.90 to $7.69)
Matt McCall: CNH Global (CNH $65.82 to $15.60)
Jonas Max Ferris: Nakoma Absolute Return Fund (NARFX $23.06 to $22.06)
Jonathan Hoenig: CurrencyShares Mexican Peso (FXM $91.98 to $73.81 )

Finally, VIX+MORE- With Schaeffer's and Connors view of the VIX;