Wednesday, October 26, 2011
Rosenberg Daily - Market Overbought
If we told you at the start of the year that Europe would be on the brink of a financial disaster with no credible solution, would you have believed the market would be up for the year?... If we told you last December, when the consensus view was around 3% real GDP growth for the year, only to then be halved by October, would you have believed the market would be in the green column for the year?... Or what if we said at the end of 2010 that the ECRI weekly smoothed leading index would have swung to a recessionary -10.1 as of now from +3.1 at the end of 2010, would one have really thought the major averages would be up for the year? Or say the broad Chicago Fed National Activity Index — now at -0.22 versus +0.44 last December? Is this a data point that warrants an up-market for the year? Hard to believe.... This market is as overbought now as it was oversold nearly four weeks ago.