10.26.14: Weekend LinkFest – Others You Should be Reading

Haven’t done a LinkFest in a while. Tadas shouldn’t be worried.

Bob Lang, of Explosive Options (@aztecs99) and Suz Smith (@SuzyQ76022), one of Bob’s partners in the chat-room service, came through Chicago Friday night, October 24th, and we had dinner at one of Chicago’s famous steakhouses. I got to collect on a bet from the first Blackhawk’s – LA King’s series in 2012, when the Blackhawk’s went on to win their 2nd Stanley Cup. Unfortunately, I do owe Bob for last year’s Blackhawk’s – LA King’s Western Conference final, where the King’s beat the Hawk’s in overtime to move on to the Stanley Cup. Bob does a lot of writing for TheStreet and is a frequent contributor to Jim Cramer’s Mad Money show in terms of technical analysis, over and above what he does at Explosive Options. I do look forward to paying off on the bet, possibly at Jim Iurio’s restaurant in the northern suburbs of Chicago, when Bob returns to town. Bob has had me on his Southern California radio show a few times to talk SP 500 earnings, and we’ve greatly appreciated the opportunity to talk be on his radio show. Bob does great work for MadMoney and on the Twittersphere.

Ryan Detrick, with his post on the “most bullish 5 days of the year” starting Monday, October 27th. Ryan is out at Stocktoberfest in San Diego, with Josh Brown and a gathering of investing royalty this weekend;

Great post by Norm Conley of JAG Capital in St Louis. SP 500 earnings yield less the Baa corporate bond yield. If you aren’t following Norm at @JAG_Norm) you should be – Normie is as good as Ryan Detrick and Josh Brown in Twittersphere. This graph tells me that SP 500 still relatively undervalued vis-à-vis corporate credit;

Here is another high-quality graph from Norm on the 10-year Treasury yield (CMT). I thought for sure the 10-year Treasury was “broken” at the end of 2013. The yield curve flattening has hurt my balanced account performance for sure in 2014.

From @BobBrinkers blog, a Calculated Risk link on New Home Sales. Here is one article from the TheStreet that details how getting a mortgage should be a little bit easier.

Josh Brown kicks off his new regular Fortune gig, with a great article on the return of the Mom & Pop investor to the stock market, albeit with far greater apathy than in 2007 and the late 1990’s. I continue to think this retail sentiment “tell” is crucial for the bull market in the SP 500 continuing. I graduated from college in May, 1982, and was taking Money & Banking classes in 1980 when Volcker was running the Fed and the 30-year Treasury was trading at 12%, then 20% and back again. It was what ignited my interest in the business and that passion has never left. The point is – like a lot of my generation – I never saw a real bear market in stocks until 2001 – 2002 and the economy (relatively) remained in pretty good shape. It was easy to be bullish in the 1990’s: communism was dead, this new fancy thing called technology was making life simpler and faster and better, and real estate was a sure thing too. Couldn’t lose… The point being that my generation, and really the entire baby-boom generation, had never seen, invested or lived through one nasty bear market, and we saw TWO 50% corrections in the SP 500 from in the 10-year stretch from January 1, 2000, through December 31, 2009. What happened in 2008, was the quintessential 100-year flood, and was the kind of “systemic risk” that I think retail investors will never see again, either in my lifetime, or if I did have kids, in their lifetime. Once again, Josh nails it – reluctance on the part of the retail investor is probably a very good sign these days.

Need to blow my own horn a little bit here: our q3 ’14 earnings prognostications are bearing fruit. Don’t think earnings are or were the issue in this recent 8% correction in the SP 500 despite the nattering nabobs three during September and early October.  Earnings data spouted on financial media is often distorted like economic data: the data is re-packaged to support or validate a guest’s bias or position, rather than viewed objectively and with rigor. Most of what you hear on mainstream financial media is superficial and vacuous. Ed Yardeni does a great job with earnings info and trends, and Id like to think this blog (www.fundamentalis.com) has drilled down and educated readers on SP 500 earnings. There is a lot more to the analysis than what you see in the Financial media.

FundamentalMomentum (@FMInvesting) gives both side of this recent bounce in the SP 500. As I told clients this weekend, the market will provide the final answer. Let the market tell us where it is headed;

Don’t know AcrosstheCurve (@acrossthecurve) but do think he provides some GREAT commentary on all things fixed-income. Here is Friday’s tweet on Spread commentary courtesy of BAML.

So many think the potential bottom for crude oil is $75. This (what I think ) is a decent article from SP Capital IQ on the commodity sector also supports the $75 crude oil level.

The Brazil election tonight, being called a “nail-biter” by the Economist. There will be a very clear choice made between a socialist and a capitalist. More than two  years later, I’m still surprised that Greece’s 2012 election didn’t make a hard-left turn towards more populism, and away from the EU. Sometimes countries can surprise you.

Bespoke and Paul Hickey do fabulous work. Even the 4 pm central “Fast Money” segment with Melissa Lee is carrying more and more of Bespoke’s work. I wish I could link more of the Bespoke charts: those would worth a blog post of their own. Bespoke thinks we are entering a critical week this week, as the SP 500 nears its 50-day moving average at 1,966.94 per our technical software. The SP 500 closed at 1964 and change Friday, it’s best week in 2 years.

Thanks for reading and stopping by our (my) little corner of the world.

Given Ryan Detrick’s work, if the SP 500 can break above 1,966 – 1,975 this week, and we have another strong week of returns for the SP 500, look for a run to the all-time high and a likely move to an all-time high in the SP 500 by year-end.

Appreciate all the comments and emails from readers.

Trinity Asset Management. Inc. by:

Brian Gilmartin, CFA

Portfolio manager


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