HUSSMAN: These 5 Conditions Mean The Market Is Going To Plunge ("Within Days")

TBI ^ | 3-11-2012 | Joe Weisenthal

[blam]

HUSSMAN: These 5 Conditions Mean The Market Is Going To Plunge

Joe Weisenthal
March 11, 2013

There's a big story in Barron's this weekend titled The Worst of Times to Buy Stocks?, which highlights the gloomy warnings of well-known investor John Hussman and technical guy Walter J. Zimmermann Jr.

Hussman's bearishness is well known, but the article by Randall W. Forsyth boils down Hussman's bearishness to four criteria:

• the Standard & Poor's 500 trading at more than 8% above its 52-week exponential moving average

• the S&P 500 up more than 50% from its four-year low

• the "Shiller P/E," based on the cyclically adjusted trailing 10-year earnings, developed by Yale economist Robert Shiller, greater than 18; it's currently 22

• the 10-year Treasury yield higher than six months earlier

• the Investors Intelligence's bullish advisory sentiment over 47%, and bearishness under 25%; in the latest data, the numbers were 47.9% bulls and 26.6% bears

Apparently all those conditions are nearly in place now, as they were in 1987, 2000, and 2007.

Meanwhile, Zimmerman agrees with all that, plus he cites the inevitability of a market decline owing to rising taxes, austerity, too much bullishness, and gas prices. He sees a "perfect storm" manifesting itself within days.

Read the full story here >

[AlmaKing]

The 4 criteria are apparently 5. If the auther could count, maybe I’d pay attention.

[EVO X]

In the words of every stock market analyst I’ve ever heard: this could happen, then again, it might not.

I read Hussman's weekly commentary. He doesn't say that it is going to happen, but conditions are such that his alarm bells are going off. I wouldn't exactly call him a perma-bear. At current stock market levels, he thinks the stock market will return somewhere around 4.5% per year over the next 10 years in a non linear fashion..

[man_in_tx]

Too funny!

[Oceander]

I read Hussman's weekly commentary. He doesn't say that it is going to happen, but conditions are such that his alarm bells are going off. I wouldn't exactly call him a perma-bear. At current stock market levels, he thinks the stock market will return somewhere around 4.5% per year over the next 10 years in a non linear fashion..

Unfortunately, it's the non-linear bit that'll kill ya.

[pingman]

“As Tonto used to say to the Lone Ranger, “Quien sabe?””

Only when south of the border there, hombre!

[EVO X]

Unfortunately, it's the non-linear bit that'll kill ya

We can always go out and buy an anuity that promises to pay 22% the first year or 8% forever.../s

[blam]

Global liquidity peak spells trouble for late 2012

[EVO X]

Global liquidity peak spells trouble for late 2012

We could be in trouble now but won't know it until late 2012 or early 2013. All this continued CB pumping and changing the rules of the game makes me terribly uneasy.

[Misterioso]

I thought Tonto was referring to his boss as chemo sauvé.

[Misterioso]

Ohio silver.

[blam]

[Misterioso]

Looks like the old Corrigan movie ranch in Simi Valley. I used to crawl around in those rocks as a kid.

[Varsity Flight]

“All this continued CB pumping and changing the rules ....

Extortion by Forced Labor 2014, age 26.

Arbeitsziehungslager: Forced Labor Camp, U.S. Territory.